The Kenyan government is set to receive KSh32.95 billion (USD 255.4 million) from Uganda following its investment in the ongoing sale of shares in the Kenya Pipeline Company (KPC).
The deal marks a significant step in strengthening regional energy cooperation and securing long-term fuel transport access.
President William Ruto announced last November that Uganda had expressed interest in acquiring partial ownership of KPC.
The investment will be executed through the current public share offering, with the Uganda National Oil Company (UNOC) set to become a strategic shareholder.
Strategic Control of Fuel Transit
Through the acquisition, UNOC will gain partial control over the critical pipeline corridor that transports most of Uganda’s petroleum imports.
Approximately 65 percent of transit petroleum moving through the KPC network is destined for Uganda, accounting for roughly 35 percent of the company’s total revenue.
This arrangement secures Uganda’s energy supply chain while reinforcing Kenya’s position as a regional petroleum hub.
Details of the IPO
The Initial Public Offering (IPO), which closes on February 24, forms part of Kenya’s broader strategy to divest about two-thirds of its stake in KPC. The overall sale is valued at KSh106.31 billion (USD 824 million).
Proceeds from the transaction will be channeled into an infrastructure investment fund as well as a sovereign wealth portfolio aimed at financing long-term strategic development projects.
Court Clearance
The High Court recently paved the way for the IPO after dismissing a petition challenging the Privatisation Act, 2025. Justice Bahati Mwamuye ruled against civil society groups who argued that the law weakened parliamentary oversight.
The decision allowed state corporations like KPC to proceed with share sales under the current legal framework.
Uganda’s Broader Infrastructure Plans
In a related development, Uganda has announced plans to construct a new railway line linking it to Tanzania via its southern corridor.
The line will pass through southern Uganda and terminate at Mpondwe near the Democratic Republic of Congo border.
Uganda currently routes a substantial portion of its exports through the Port of Mombasa, and it plans to integrate its Standard Gauge Railway network with Kenya’s rail system to enhance efficiency in regional trade.
Strengthening Regional Ties
The KPC IPO underscores growing economic ties between Kenya and Uganda. While Kenya secures capital for development priorities, Uganda gains guaranteed access to strategic fuel transport infrastructure.
The agreement highlights how regional partnerships in infrastructure and energy security are becoming central to East Africa’s economic transformation.
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