KENYA Tea Development Agency has started investing in small hydro power projects with a target to produce a total of 20MW in three years time, the management has said. KTDA whose core business is in tea marketing announced on Tuesday that it is "actively pursuing" 10 sites in various parts of the country to put up small power stations.

"There is already one mini hydro plant in Meru, the Imenti power company which produces power used in the factory there and the balance is sold to the national grid," said KTDA chief executive Lerionka Tiampati. The agency has also recently broken ground in Nyeri for another mini hydro power plant whose output capacity will be 5MW upon completion.

"By going into small hydropower projects we will guarantee extra income which will go a long way in reducing our cost of production," said Tiampati. KTDA's cost of production for the year ended June 2012 rose 77.71 per kilo of made tea compared to Sh67.47 for the same amount the previous year.

This translates to a 15 per cent rise in production costs which is attributed mainly to expensive labour and energy costs among others. In addition to the 10 small power plants that KTDA plans to build, the agency is also looking to invest in geothermal power projects being conducted by other farms such as the Geothermal Development Corporation.

Tiampati said the firm will also explore investment opportunities in the wind and solar energy production to reduce its energy costs as well as enhance power supply to the public. Aside from energy projects, KTDA is also eyeing the financial services sector though this plan is still in early stages of discussion and implementation has not started.