The Kenya Tea Development Agency (KTDA) has signed a US$55M loan agreement with IFC, a member of the World Bank Group, in partnership with the Global Agriculture and Food Security Programme, the French Development Institution (Proparco), and the Netherlands Development Finance Company (FMO). The loan will fund construction of seven small hydropower projects across tea growing regions.
Construction of each hydro power project, with an installed capacity ranging from 1.1MW to 6.5MW, will take two to three years to complete and be fully operational. The hydro plants are intended to reduce energy costs for each tea factory which is currently the single biggest cost component.
Oumar Seydi, IFC Director for Eastern and Southern Africa, said: "Access to power is one of the key constraints for agriculture in Africa. KTDA is innovating to address power shortages by developing its own captive and renewable power supply. Reducing costs of processing will help make Kenya's tea sector more competitive in a global marketplace and increase revenues for the 560,000 farmers who supply green leaf to the 66 KTDA-managed tea factories."
KTDA Power Company (KTPC), a subsidiary of KTDA Holdings, will develop the projects in an effort to power the tea factories with renewable energy in the short and medium term. They aspire to not only offer consultancy on energy solutions within the region but also to become an independent power producer with a number of projects under its portfolio.
SOURCE: Kenya Tea Development Agency