The Kenya Tea Development Agency (KTDA) has denied allegations that over one billion shillings contributed by farmers from the West of the Rift Valley was diverted to the East of the Rift Valley.
In a statement released on Tuesday, October 14, KTDA dismissed claims made by a section of leaders from Kericho and Bomet Counties as false, misleading, and a disregard of the transparent and verifiable financial framework guiding the implementation of the Settet Power Generation Company’s small hydro projects.
According to KTDA, Settet Power Generation Company Limited was incorporated in October 2010 and is owned equally by seven tea factory companies in Kericho and Bomet Counties, namely Kapkatet, Litein, Tegat, Momul, Kapkoros, Mogogosiek, Kapset and KTDA Power Company Limited. Each of the eight shareholders holds a 12.5 percent shareholding.
The company was established to develop small hydro power plants to supply reliable and affordable electricity to the factories, thereby reducing production costs and improving farmers’ earnings.
Currently, two projects are under implementation: the Chemosit Small Hydro Plant with a capacity of 2.5 megawatts and the Kipsonoi Small Hydro Plant with a capacity of 2.6 megawatts.
“These projects are financed on a 65:35 debt-to-equity ratio, translating to a total equity requirement of Ksh 1.1 billion by the shareholders. As of October 2025, shareholders have contributed Ksh 1.03 billion, all of which has been fully utilized within the two projects in line with the approved budgets,” KTDA explained.
“Detailed records show that Ksh 580.8 million has been paid to civil works contractors, Ksh 204.8 million to project consultants, Ksh 350.8 million for electromechanical equipment, and Ksh 71.4 million for land acquisition at Chemosit and Kipsonoi. In total, KSh 1.208 billion has been spent on the projects, with a temporary deficit of Ksh 174 million financed through internal borrowings. These funds have remained within the Settet Power projects and none has been diverted elsewhere.”
The agency further noted that the challenges experienced in project completion have been mainly due to delayed debt closure by international financiers, land acquisition processes, and transmission wayleave overlaps with Kenya Power.
“KTDA remains fully committed to transparency, accountability, and prudent financial management. The Settet Power projects are farmer-owned investments meant to achieve long-term energy self-sufficiency and operational efficiency for factories in the West of the Rift Valley,” the statement read.
The statement comes in response to allegations made by Kericho Senator Aaron Cheruiyot and Governor Eric Mutai, who demanded that KTDA account for over 1 billion shillings allegedly raised by farmers from the west of the Rift Valley for the construction of the Setet hydropower project on Chemosit River in Kericho County.
The leaders claimed the funds were diverted to financing hydro projects benefiting factories east of the Rift.
They argued that the diversion of funds has left tea factories in the western region grappling with high production costs, contributing significantly to the low bonus payments announced for farmers this year.
The leaders further called for an urgent review of KTDA’s management contracts with tea factories across the country.
The Ministry of Agriculture recently announced that it will not dissolve the Kenya Tea Development Agency despite tea farmers’ complaints about its management practices.
In a statement on Thursday, October 9, Agriculture Principal Secretary Kipronoh Ronoh said that instead of disbanding the agency, the ministry will reinforce its oversight on the agency’s financial management and restructure its governance structure to restore farmers’ trust.
“Beyond these macroeconomic factors, the Ministry acknowledges the urgent need to address governance, accountability, and transparency challenges within KTDA,” the PS stated.
