Kenya seeks $824mn from pipeline company privatisation as debt pressures mount

Kenya has launched the privatisation of Kenya Pipeline Company (KPC), targeting about $824mn from an IPO that would sell a 65% stake, as the government seeks fresh funding for infrastructure and to ease pressure on public borrowing.

On the implied pricing, raising $824mn for 65% suggests an equity valuation of roughly $1.27bn for KPC, making it Kenya’s biggest planned listings since that of telecoms giant Safaricom (KSE:SCOM) in 2008, and its first since 2015. The sale opens on January 19 and closes on February 19.

KPC is currently 100% owned by the Government of Kenya and operates “common user” fuel infrastructure spanning a 1,342km pipeline loop from Mombasa via Nairobi to Nakuru, Eldoret and Kisumu, serving Kenya and regional markets including Uganda, Tanzania, Rwanda, Burundi, eastern DRC and South Sudan.

The company generated KES38.59bn of revenue and KES7.49bn profit after tax in FY2024/25, with EBITDA of KES18.59bn, supporting the government’s case that the pipeline operator is a cash-generative infrastructure asset.

In FY2024/25, KPC generated KES38.59bn ($298mn) in revenue, recorded a profit after tax of KES7.49bn ($58mn) and posted an EBITDA of KES18.59bn ($144mn), supporting the government’s case that the pipeline operator is a cash-generative infrastructure asset.

KPC’s earnings are underpinned by regulated transport and storage tariffs. In its tariff application to Kenya’s energy regulator EPRA, KPC said prevailing tariffs were approved for the 2022/23–2024/25 control period, including a composite pipeline tariff of KES5.44 per m3 per km for 2024/25 and airport hydrant tariffs of $25.29 per m3 at JKIA and Moi International Airport.

Proceeds are intended to support new state investment vehicles and priority projects. The government is setting up an infrastructure fund and a sovereign wealth fund, with privatisation receipts—starting with KPC—meant to seed investment in sectors including agriculture and power, alongside other infrastructure needs.

President William Ruto’s administration is selling stakes in state assets, including KPC, against a backdrop of debt-servicing costs sapping close to 70% of annual government revenues, and strong public opposition to higher taxes.

The planned sale is also politically sensitive, given KPC’s strategic role in national fuel security and regional supply chains. Recent reporting has flagged transparency and legal-hurdle concerns around the privatisation push, underscoring the need for clear governance safeguards and disclosure.

Potential strategic demand has been signalled at the regional level. Uganda is expected to be a significant investor in the transaction, reflecting KPC’s importance to inland fuel markets that rely on the Mombasa corridor. Uganda plans to acquire a stake in KPC using part of a proposed $2bn loan backed by global oil trader Vitol.