The Kenyan government is set to receive a total of Ksh32.95 billion (USD255.4 million) from the government of Uganda as part of the money that Kampala will be channelling to acquire stakes in the Kenya Pipeline Company (KPC) sale.
The deal, which will see Uganda secure long-term access to regional fuel transport infrastructure, comes months after President William Ruto announced during a visit in November last year to the East African nation that, indeed, Uganda had expressed interest in the partial ownership of the crucial asset.
The investment will be made through the ongoing public share offering by KPC, in which Uganda National Oil Company (UNOC) will become a strategic shareholder, according to Bloomberg.
The investment is expected to give UNOC control over part of the pipeline corridor that handles the bulk of Uganda’s petroleum imports.
An image of Kenya Pipeline Company holding deport and an insert of the Nairobi Securities Exchange market.
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KPC/NSE
Nearly all of Uganda’s refined petroleum imports are transported via the pipeline network stretching from the Port of Mombasa along Kenya’s coastline to key transit hubs in the western corridor.
According to the neighbouring country’s energy ministry, approximately 65 per cent of transit petroleum volumes moving through the pipeline network are destined for Uganda, while the country contributes nearly 35 per cent of the operator’s revenue base.
The initial public offering, scheduled to close on Tuesday, February 24 at 5pm, is part of the government’s strategy to offload roughly two-thirds of its stake in the national pipeline infrastructure through a deal valued at Ksh106.31 billion (USD824 million).
According to the government, proceeds from the share sale are expected to support the development of a proposed infrastructure investment fund and a sovereign wealth portfolio aimed at financing future strategic projects.
Last week, the High Court of Kenya dismissed a petition challenging the Privatisation Act, 2025, effectively paving the way for the sale of stakes in state-owned enterprises, including KPC.
In his judgment, Justice Bahati Mwamuye, in a ruling delivered at the Milimani Law Courts on February 19, dismissed a petition by civil society organisations, among them the Consumers Federation of Kenya (CoFEK), that had sought to invalidate the law because it undermined parliamentary authority.
Meanwhile, in a related development, Uganda, which is one of Kenya’s key regional trade partners, has announced plans to construct a new railway line connecting it to Tanzania through its southern and southwestern transport corridor.
According to a document from the Ugandan Ministry of Transport and seen by Reuters, the proposed railway would run from the border with Tanzania, pass through southern Uganda, and terminate at the town of Mpondwe near the border with the Democratic Republic of Congo.
Uganda currently channels a large portion of its commodity exports through the Port of Mombasa and has previously announced intentions to link its Standard Gauge Railway (SGR) network to Kenya’s rail system.
The Standard Gauge Railway (SGR) train in transit.
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African Marketing Confederation
