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Co-op Bank Backs KSh1.7Bn Hydropower Project for Tea Farmers
Co-operative Bank of Kenya is financing a KSh1.7 billion hydropower project set to lower energy costs and boost earnings for thousands of tea farmers in Nandi County.
The bank has committed KSh967.5 million towards the Taunet Small Hydropower Project, a 2.8MW run-of-river plant. It will supply clean, reliable power to four tea factories under the Kenya Tea Development Authority.
Once operational, the project will provide a stable and low-cost alternative to grid electricity. As a result, factories will cut processing costs and improve the competitiveness of Kenya’s tea exports.
The project is being developed by Chemuka Power Company. It brings together Chebut, Kapsara and Mudete tea factories in partnership with KTDA Power Company Limited.
Speaking during the groundbreaking, KTDA Holdings Acting Group CEO Francis Miano said the project marks a shift towards green energy investments.
“Shareholders have embraced renewable energy and climate-smart initiatives. These efforts will improve returns. This would not have been possible without strong partnerships, including financial support from Co-operative Bank,” he said.
Lower costs, stronger farmer incomes
Energy remains one of the biggest costs in tea processing. In many cases, reliance on the national grid exposes factories to price fluctuations and supply disruptions.
However, the Taunet plant will help reduce these risks. By generating captive hydropower, factories will gain more control over their energy supply. Consequently, they are expected to cut electricity expenses significantly.
These savings will likely translate into better payouts for farmers. Thousands of smallholder farmers in Nandi County supply the factories. Therefore, the benefits will ripple across rural households.
Co-op Bank Backs KSh1.7Bn Hydropower Project for Tea Farmers
Building on a proven renewable energy model
The Taunet investment builds on Co-op Bank’s strong track record in renewable energy financing. Previously, the bank funded Gura, Chania and Metumi hydropower plants. These projects supply tea factories in the Aberdare region.
In addition, surplus power from these plants feeds into the national grid through agreements with Kenya Power. This model has already proven successful.
Co-op Bank Sector Head for Agribusiness, Manufacturing and Trade Olivia Ong’ele said the financing aligns with the bank’s sustainability agenda.
“We are proud to support projects that create long-term value for communities and key industries. This investment underscores our commitment to clean energy and empowering smallholder farmers,” she said.
Beyond cost savings, the project will also cut carbon emissions. Run-of-river hydropower uses natural water flow without large reservoirs. As such, it remains one of the most environmentally friendly energy sources.
The Taunet project forms part of KTDA’s wider strategy to expand renewable energy across its network. Overall, it strengthens Co-op Bank’s position as a key financier of green infrastructure and ESG-driven investments in Kenya.
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