In the 1970s, the combination of high oil prices, the large fluctuations of world molasses prices and sharp a rise in transport costs enabled the creation of the economic and political conditions to set up a bioethanol programme in Kenya. This programme was plagued with difficulties from the start. Initially, the idea was to set up two ethanol plants using sugarcane molasses - the Madhvani and the Muhoroni plants. The Madhvani plant was never completed due to a number of techno-economic and political reasons. The plant was too costly and sophisticated and took little advantage of the local conditions. Due to lack of access to information and untied finance, the choice of technology in the international market was severely constrained and the resulting technology chosen was very sophisticated and capital intensive. Unlike the KCJ woodstove programme, government involvement in the joint project had a negative impact and distorted the economics, which was further complicated by the absence of a clear and cohesive long term government policy on ethanol production (Rosillo-Calle et al 1991).

The second smaller plant integrated into an existing sugar refinery was, however, successfully constructed (the Muhoroni plant inland from Kisumu). The Muhoroni plant was completed in 1983. It is an integrated sugar-ethanol plant which also produces 4 tons of baker's yeast per day. At the current capacity of 60,000 litres day, it produces all of Kenya's ethanol using sugarcane molasses. This is blended at 10 per cent with gasoline. At present the plant operates at 75 per cent of its capacity.