The Kenyan government will sign a financing agreement with India for expansion of the Rift Valley Textile Company, once the latter is satisfied with the firm's revival.
Rivatex's operations will be expanded at a cost of Sh7.9 billion. The firm is owned by Moi University, which acquired and revived it after it collapsed.
Yogeshwar Varma, India's High Commissioner to Kenya, visited the factory on Saturday to assess its operations before negotiations for the agreement are completed.
The Export-Import Bank of India is to provide funding for the planned expansion of the textile company.
"We are looking at details of providing the soft loans for funding the Rivatex expansion project and plans for the project are in advanced stages," he said during a courtesy call to Uasin Gishu Governor Jackson Mandago.
Varma said the Indian government has already received a final report on the project and is now examining it for details. However, he said cotton shortage is a major hurdle and should be addressed under the plan to expand the factory's operations.
"We met the Rivatex team to look at how we can bring up the factory in a commercially viable manner," Varma said.
Under the expansion plan, new machinery will be installed to boost its production capacity. Experts from India have assisted in laying out a marketing strategy for Rivatex's products.