Kenya has formally kicked off the privatisation of the state-run petroleum transporter Kenya Pipeline Company (KPC), as President William Ruto’s government seeks to raise money for infrastructure.
The administration is aiming to raise about $824 million through an initial public offering (IPO), selling 65 per cent of KPC in what would be Kenya’s first IPO since 2015.
Part of the proceeds is set to be channelled into a new fund to support road building, the modernisation of ports and airports, and expanded energy infrastructure.
The sale forms part of a wider push by the Ruto administration to dispose of stakes in valuable assets, including KPC and telecoms giant Safaricom, as it looks for alternatives to new taxes amid a tight fiscal position. Debt servicing costs are estimated to absorb close to 70 per cent of government revenues, and public opposition to tax increases remains strong. This year’s budget avoided introducing new taxes, a year after proposed hikes sparked youth-led protests that left hundreds dead.
However, analysts and opposition figures warn that legal challenges and transparency concerns could derail the KPC float, with critics arguing the company is being undervalued.
Opposition senator Okiya Omtatah is leading a petition filed this month seeking to stop the privatisation. The case argues there was insufficient public participation and that the process did not meet constitutional requirements for disposing of public assets, including standards on transparency and accountability.
Former Central Bank of Kenya chairman Mbui Wagacha told Semafor that “the process was not transparent”, adding that worries about boardroom dealings “affect investor confidence” and could make the IPO less “attractive”.
KPC operates more than 1,342 kilometres of pipeline and at least 884,000 cubic metres of storage capacity, moving imported fuel from the port of Mombasa and serving neighbouring countries including Burundi, DR Congo, Rwanda and Uganda.
The company is expected to list at an implied valuation of about Kes 163.6 billion (roughly $1.2 billion). The offer opens on 19 January and closes on 19 February, with trading scheduled to begin on 9 March on the Nairobi Securities Exchange. The government will retain 35 per cent.
Ruto has urged small investors to take part, saying shares could be bought for as little as 200 shillings. “We have said the shares will be sold to everyone,” he said. “Come and buy, so that when profits are announced, you are part of it. You take your share and use it to grow your business.
Separately, the government is also pursuing a sale of a 15 per cent stake in Safaricom to Vodacom for $1.6 billion, though that deal still requires approvals and is also attracting scrutiny and potential legal threats.