• Kenya Sugar Board (KSB) plans a strategic shift toward ethanol and renewable energy production.

• Rising electricity demand strengthens the business case for cogeneration and independent power projects.

• Sugar producers aim to diversify revenue streams beyond traditional sugar sales.

The Kenya Sugar Board (KSB) is preparing a strategy to accelerate diversification across the sugar industry. Jude Chesire, Director General of the regulator, announced the plan on the sidelines of the Informa Africa Sugar Conference, the continent’s leading event dedicated to the sugar and ethanol industries, held in Nairobi from April 14 to 15.

According to a statement published on the Ministry of Agriculture’s website, the roadmap outlines a shift from traditional sugar production to a diversified agro-industrial model focused on ethanol output and renewable energy.

The transformation rests on three pillars. First, producers will increase ethanol production using molasses, a by-product of sugar refining. Second, companies will generate electricity from bagasse, the fibrous residue of sugarcane used in cogeneration systems. Third, operators will promote industrial use of by-products to achieve a zero-waste objective across the value chain.

“The Kenya Sugar Board leads modernization efforts based on high-yield cane varieties, mechanization and precision agriculture technologies to improve efficiency and sustainability,” the statement said. These initiatives aim to increase sugarcane output and support industrial diversification by ensuring sufficient raw material supply.

Opportunities Beyond Sugar Commercialization

This strategic shift could not only diversify industry revenues but also strengthen local energy security in a country where electricity demand continues to rise.

Electricity demand in Kenya reached a record 2,439.06 MW in December 2025. Kenya Power, the state-owned transmission and distribution company, attributes the increase to rising grid connections, industrial growth and network expansion. Industrial customers already account for more than half of total electricity sales, which intensifies pressure on supply.

This trend is driving new investment opportunities in power generation, including renewable energy projects, backup thermal capacity and energy storage solutions. It is also creating a favorable market for independent power producers and grid infrastructure development.

Moreover, bioethanol production offers a strategic alternative to fossil fuels used in road transport. Across Africa, countries such as Nigeria and Uganda have already implemented regulatory frameworks that support ethanol blending in domestic transport fuels.

While the sector awaits further developments, Kenya’s sugar industry still derives nearly all of its revenue from sugar production and sales. Data from the national statistics office show that sugarcane cultivation covers 300,000 hectares, while average annual sugar production reached 677,761 tons between 2020 and 2024.

Stéphanas Assocle