Uganda to Invest Ksh32.95 Billion in Kenya Pipeline IPO Deal
In a significant cross-border investment, the Government of Uganda has finalized its participation in the Kenya Pipeline Company (KPC) Initial Public Offering (IPO), committing approximately KSh 32.95 billion (equivalent to about USD 255.4 million).
This move, executed through the Uganda National Oil Company (UNOC), positions Uganda as a strategic shareholder in KPC, the state-owned entity managing Kenya's extensive petroleum pipeline network. The investment comes as the IPO, which opened on January 19, 2026, and was extended to close on Tuesday, February 24, 2026, aims to raise KSh 106.3 billion by selling a 65% stake in KPC at KSh 9 per share, with the Kenyan government retaining 35%. Uganda's high-level delegation, led by Energy Minister Ruth Nankabirwa Ssentamu, sealed the deal in Nairobi amid ongoing privatization efforts.
The stake is driven by Uganda's heavy dependence on the KPC network, which transports around 90% of the country's refined petroleum imports from the Port of Mombasa to inland depots. Reports indicate that roughly 65% of transit volumes through the pipeline are destined for Uganda, contributing nearly 35% of KPC's revenue. By acquiring shares, Uganda seeks to secure long-term access, enhance energy security, ensure stable and affordable fuel supply chains, and gain influence over the critical infrastructure corridor. This follows earlier discussions sparked by President William Ruto's visit to Uganda in November 2025, where interest in partial ownership was expressed, and aligns with broader regional energy diplomacy.
The IPO, one of Kenya's largest privatization exercises and its first fully digital share offer, faced initial challenges including valuation debates (some Ugandan analysts pegged fair value lower at around KSh 4.61 per share) and a court petition dismissal on February 19, 2026, clearing the path forward. Proceeds will support Kenya's infrastructure investment fund and sovereign wealth initiatives. For Uganda, the move reinforces strategic positioning in East Africa's energy landscape, potentially including governance rights such as board representation, while complementing plans for alternative transport corridors like a new railway link to Tanzania.
