A Ksh 967.5 million financing commitment by Co-operative Bank of Kenya toward a Ksh 1.7 billion small hydropower project in Nandi County marks continued expansion of private capital into renewable energy infrastructure tied to agricultural processing systems and cost efficiency in the tea value chain.
Co-operative Bank of Kenya (Co-op Bank) made the commitment for the Taunet Small Hydropower Project, a 2.8MW run-of-river facility designed to supply electricity directly to Kenya Tea Development Agency (KTDA) linked tea factories once completed and operational.
Chief of Staff and Head of Public Service Mr Felix K. Koskei, EGH, witnessed the commitment event that brought together government representation, tea sector stakeholders and financial actors around an energy project aimed at reducing production costs in tea processing operations.
The project is structured around direct industrial supply, where electricity generated from river flow will be transmitted to factories in order to reduce dependence on national grid supply and stabilize long-term production costs.
The hydropower facility will operate as a run-of-river system, a generation model that does not rely on large storage reservoirs and instead produces electricity through continuous natural water flow for industrial consumption.
Once operational, the plant is expected to provide cleaner and more cost-efficient energy to tea factories under KTDA, where electricity remains one of the highest input costs in tea processing operations.
“This investment is expected to enhance competitiveness in Kenya’s tea sector while improving earnings for thousands of smallholder farmers,” stakeholders noted during the commitment event, linking energy cost efficiency at factory level to income outcomes for tea producers supplying green leaf.
The financing reflects a broader shift in infrastructure funding where commercial banks are directing capital towards renewable energy systems embedded within agricultural production chains rather than standalone power generation projects.
Participants at the event said the project design reflects a move toward dedicated energy sourcing for industrial users, where localized generation supports predictable production planning and long-term cost management across processing facilities.
Mr Robert Kipkemboi, Chairman of Chebut Tea Factory, attended the event representing factory-level stakeholders expected to benefit from improved energy reliability and reduced operational expenditure once the project becomes operational.
The investment reinforces Co-op Bank’s role in infrastructure financing linked to agriculture, particularly in export-oriented sectors where cost structure efficiency directly influences competitiveness in international markets.
Tea remains one of Kenya’s key foreign exchange earners, and energy costs continue to shape factory margins, making renewable energy projects increasingly relevant to sector sustainability and productivity.
Once completed, the Taunet Small Hydropower Project is expected to add 2.8MW of clean energy capacity to local supply systems while reducing pressure on the national grid in rural industrial zones.
The project adds to a growing pipeline of renewable energy-linked agricultural investments where financing is structured around efficiency gains, cost reduction and stability in commodity processing value chains.
