Italian consortium Maire Tecnimont SPA is building a Sh32 billion ($300 million) fertiliser factory in Nakuru.
The firm's target is producing 550 tonnes per day of Calcium Ammonium Nitrate and fertilisers based on Nitrogen, Phosphorus and Potassium (NPK).
The plant that will be dedicated to local agri-business is scheduled to roll out by 2025.
The move is expected to tame the high prices of the farm input and address perpetual shortage of the product in the country.
The group through its subsidiaries MET Development, Stamicarbon and NextChem is building the renewable power-to-fertiliser factory in partnership with Naivasha-based Oserian Development Company.
Oserian Two Lakes Industrial Park, a new 150-hectare sustainable development initiative in Nakuru, will house the plant.
The facility is privately owned and operated by ODC and is the anchor to a 7,500-hectare mixed-use development, called Oserian Two Lakes, which comprises horticulture, industry and commerce, residential, tourism and wildlife conservation across three valleys.
"We're very pleased to announce the start of this exciting project, thanks to the collaboration with a pioneering player such as Oserian Development Company," Maire Tecnimont Group chief executive Pierroberto Folgiero told the Nation in an interview last week.
"With this strategic initiative we aim to unlock the potential of decarbonising the fertiliser industry using renewable energy as a feedstock."
The fertiliser factory will support Kenya's low carbon and inclusive growth, its agricultural output and its smallholder farmers and communities.
It will be located near the country's largest geothermal energy basin and will be partly powered by solar energy sources produced on-site, displacing the need for fossil fuels, and eliminating carbon from production.
Projected carbon emission reduction is about 100,000 tonnes per year, compared with a gas-based fertiliser plant.
The project will utilise 70MW of renewable power, create the starting point for locally produced Kenyan fertiliser and directly generate over 100 jobs in the region, at the same time supporting the broader economy and its farmers.