The overall objective of this study was to establish the feasibility of export-based cogeneration by a leading sugar factory in Kenya. It was established that the sugar factory invested in a 34 MW cogeneration power plant to export 26 MW excess electricity to the national grid. Reliance on bagasse alone as the fuel placed the plant at the mercy of the sugar factory operations and availability of cane. The study showed that after three years of profitable operation, the cogeneration power plant became unsustainable and export to the grid was stopped. The plant faced challenges like low load factor and capacity factors occasioned by unsustainable milling of cane. This meant irregular bagasse fuel supply to the power plant hence capacity underutilization and availability of the plant which attracted huge penalties from the utility company. The study recommends policy initiatives to encourage export of electricity from the sugar industry while development of multi-fuel plants will delink the co-generation from the challenges of sugar cane factory operation. These measures will improve the power plant availability, load factor, capacity factor and reliability ultimately making bagasse cogeneration suitable for base load grid electricity supply.