Ugandans invited to buy shares in Kenya Pipeline Company

Ugandan investors, especially oil marketing companies, are being courted to take up ownership stakes in Kenya Pipeline Company (KPC), one of East Africa’s most strategic and profitable energy infrastructure firms, as Kenya moves to partially privatise the state-owned company through a landmark initial public offer (IPO).

The IPO, unveiled last week by KPC and Kenya’s National Treasury, values the pipeline operator’s assets at between KES 123 billion and KES 163 billion (about USD 951.5 million to USD 1.26 billion). It marks Kenya’s first public listing since Safaricom’s debut in 2008 and signals a broader shift toward mobilising private capital for regional infrastructure.

Under the offer, the Kenyan government will sell 65 per cent of its stake, with a significant 20 per cent ring-fenced for East African investors outside Kenya. The special regional allocation is designed to give countries that depend on KPC’s infrastructure—most notably Uganda—a direct ownership stake in an asset central to their energy supply chains.

Kenya’s Cabinet Secretary for the National Treasury, John Mbadi, said Uganda was the first regional market to be formally engaged ahead of a wider regional roadshow. He added that the IPO is expected to raise about KES 106.3 billion (approximately Shs2.9 trillion) if fully subscribed, with proceeds earmarked for Kenya’s approved 2025/26 financing plan. Mbadi expressed confidence that demand would exceed the shares on offer.

According to lead transaction advisor Belgrad Kenne, KPC shares have been priced at KES 9.00 (around Shs248), with a minimum purchase of 100 shares—placing the entry threshold at about KES 900, or Shs24,800.

Beyond the regional carve-out, the share allocation includes 20 per cent for retail Kenyan investors, 20 per cent for foreign investors, 20 per cent for institutional investors, 15 per cent for oil marketing companies operating in the region, and 5 per cent reserved for KPC employees.

KPC Managing Director Joe Sang said the company had reached an optimal valuation but required fresh capital to modernise operations and adapt to changing energy markets. Planned investments include expansion into liquefied petroleum gas (LPG) logistics and fibre-optic infrastructure along the pipeline corridor, positioning KPC as a diversified energy and logistics platform.

Sang also encouraged Ugandan oil marketers to leverage newly commissioned LPG truck-loading facilities at the Kenya Petroleum Refineries Limited, noting that discussions are underway with private investors to develop a common-user LPG facility to serve the wider region.

At a consultative meeting with Ugandan officials, including Finance Minister Matia Kasaija, Energy Minister Ruth Nankabirwa and Permanent Secretary Irene Bateebe, Mbadi said the IPO builds on ongoing bilateral engagement and a shared understanding of KPC’s regional role.

Nankabirwa noted that about 95 per cent of Uganda’s petroleum imports pass through KPC infrastructure, underscoring the pipeline’s importance to Uganda’s energy security. Kasaija welcomed Kenya’s reform agenda but sought assurances on continued access to the pipeline, recognition of Uganda’s longstanding use of the system, and consideration of a favourable shareholding arrangement reflecting its strategic reliance.

Mbadi reassured Uganda that the divestment would not compromise access or pricing, stressing that Kenya remains committed to protecting regional energy security. He said the IPO is intended to strengthen KPC’s long-term sustainability, improve operational efficiency and enable expansion without adding pressure to public debt.

On returns, Mbadi said KPC’s profitability positions new shareholders to earn estimated returns of around 8 per cent, supported by stable throughput volumes and diversification into new revenue streams.

Bateebe echoed the investment case, arguing that oil and gas infrastructure will remain commercially relevant for decades despite the global energy transition. She noted that demand for transport fuels is expected to remain strong until at least 2050, justifying continued investment in petroleum logistics.

The IPO closes on February 19, with KPC expected to list on the Nairobi Securities Exchange on March 9, 2026. While there are no immediate plans for cross-listing, Sang said the option remains open in the future. Ugandan investors can participate through the designated regional allocation or purchase shares once trading begins on the exchange.