• The power is sold to factories at reduced tariffs compared to that of Kenya power.
• The Gura Hydroproer is a project of Gathuthi, Gitugi, Iria-ini and Chinga tea factories in Zone Four.
The Gura Hydropower project produces 5.9MW daily, generating Sh1.4 million daily following the rains.
KTDA chairman Peter Kanyago on Thursday said the project, which started two years ago, is doing maximum production.
“It is currently able to power all our four tea factories and we sell excess power to Kenya Power and Lighting Company,” he said.
The Gura Hydropower is a project of Gathuthi, Gitugi, Iria-ini and Chinga tea factories in Zone Four.
The power, Kanyago said, is sold to factories at slightly reduced tariffs compared to that of Kenya Power. He said the project has greatly helped in cutting down the operations costs for the factories.
Farmers, he said, will enjoy maximum benefit once the investment used to set up the project is paid.
“It was built with farmers’ contributions and also borrowed funds and once the loans are repaid, they will have big benefits. They will have reduced power cost and at the same time will be receiving dividends from the revenue generated,” Kanyago said.
The project is worth about Sh1.6 billion. Farmers contributed 35 per cent of the money, while 65 per cent was borrowed. The loan will be repaid in 10 years.
However, Kanyago said it may start making some profit in five or four years time and shall be in a position to pay dividends.
Kanyago spoke at Gitugi Tea Factory during the factory’s annual general meeting.
The factory, he said, is a small factory receiving less than 15 million kilos of green tea leaves, but led in bonus payments after paying farmers Sh36.50 per kilo of green tea.
Kanyago attributed the payment to the factory’s efficiency as it controls its cost and realised good prices at the Mombasa auction.
“Because of that they were able to give very good prices to the farmers. So they were the ones leading in this region in the payment of bonus,” he said.
However, he said the dividend was lower than the previous year due to reduced prices overall in the country.
The factory has started an orthodox plant and is producing orthodox tea. Kanyago said orthodox teas fetch better prices in the market than the CTC (Cut Tear and Curl) teas.
He announced that Chinga and Ragati tea factories are also set to start an orthodox line by next year.
Gitugi factory chairman Peter Muchiri attributed the good payment to good quality tea and good management in terms of processing.
“I also attribute that good performance to control, especially labour costs and other costs associated with production of tea,” he said
Kanyago said orthodox tea being processed might start going to the market in two or one week because orders have already been placed.
The factory started processing orthodox tea recently, but is yet to take it to the market. The project cost the facility Sh115 million.
Gitugi is among the 11 factories in the country that have established an orthodox line.
He said because of the quality of orthodox tea in the area, the prices are expected to be high and compliment the CTC teas and therefore farmers will benefit more from the two lines of teas.
He said the factory also has its own piped water from the forest which was installed at a low cost of Sh 4 million and now the factory does not need to use the water from the local water service provider company which was costly.