Cabinet Secretary Mutahi Kagwe outlined strict conditions for the 30-year lease of four state-owned sugar companies during a parliamentary committee appearance. The handover to private firms occurred in May 2025, with requirements focused on investment and community benefits. Key terms include fixed rental fees and prohibitions on transferring the lease.
On December 3, 2025, Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe presented the terms of the lease agreements for state sugar corporations before a parliamentary committee. The leases cover South Nyanza, Nzoia, Chemelil, and Muhoroni sugar companies, which were handed over to private entities on May 10, 2025.
Busia Sugar Industry Ltd assumed control of South Nyanza, West Kenya Sugar Company Ltd took Nzoia, Kibos Sugar & Allied Industries Ltd acquired Chemelil, and West Valley Sugar Company Ltd managed Muhoroni. Rental fees are set at Kshs. 40,000 per hectare annually for Chemelil, Muhoroni, and Sony Sugar, while Nzoia commands Kshs. 45,000 per hectare. Lessees must pay concession fees of Kshs. 4,000 per tonne of sugar and Kshs. 3,000 per tonne of molasses produced, along with an upfront goodwill payment equivalent to one year's lease rental.
Kagwe emphasized restrictions, stating, “The lessee shall not assign, transfer, pledge or make other disposition of the lease or any part thereof.” Lessees are required to invest in cane development, modernize mills, upgrade machinery, and adopt new technologies for efficiency. They must also diversify into cogeneration of power, bioethanol production, and allied products. At the lease's end, all investments revert to the government. Kagwe added, “The nucleus land shall only be used for cane development and not be used as collateral by the lessee.”
Proceeds from the leases will support local communities via bonuses to farmers. While land, buildings, plants, and machinery are included in the lease, motor vehicles and livestock are exempted.