TORORO, UGANDA – In a landmark move set to reshape the region's energy landscape, Kenya has formally invited Uganda to acquire a significant stake in the Kenya Pipeline Company (KPC). President William Ruto announced on Sunday, November 23, 2025, that Kenya plans to divest up to 65% of its ownership in the strategic state corporation, opening the door for Ugandan and other East African investors.

The announcement was made during the groundbreaking ceremony for the Devki Steel factory in Tororo, Uganda, an event attended by both President Ruto and his Ugandan counterpart, Yoweri Museveni. President Ruto framed the decision as a pivotal step towards shared ownership of critical regional infrastructure. “I have given appropriate guidance on the need for Uganda and Kenya, public and private, to jointly own the Kenya Pipeline Company. That facility is not just a Kenyan facility; it is a regional facility,” President Ruto stated.

Under the proposed plan, the Kenyan government will retain a 35% strategic shareholding in KPC. The remaining shares will be listed on the Nairobi Securities Exchange (NSE), with President Ruto explicitly encouraging the Ugandan government, private entities, and citizens across the East African Community (EAC) to invest. According to officials, the Initial Public Offering (IPO) is expected to be completed by March 31, 2026, a process that received parliamentary approval in October 2025.

Deepening Regional Integration

This initiative is part of a broader strategy to enhance economic and infrastructural ties within the EAC. For years, Uganda has relied almost exclusively on KPC's network to import petroleum products from the port of Mombasa. Acquiring a stake would grant Kampala influence over tariffs, operations, and future expansion of the pipeline, potentially easing historical tensions over fuel import logistics. The move follows high-level negotiations, including a joint ministerial meeting in Nairobi last week that finalized the cooperation framework.

The partial privatization and regional co-ownership are expected to unlock new capital for significant expansion projects. President Ruto confirmed that both governments have agreed to co-invest in extending the petroleum pipeline from Eldoret, through Kampala, and onward to Rwanda and the Democratic Republic of Congo (DRC). This extension aims to solidify the Northern Corridor as the dominant fuel artery for the region, especially as Tanzania promotes its Central Corridor as a competitive alternative.

Synergy with SGR Expansion

The pipeline strategy is closely linked with ambitious plans for the Standard Gauge Railway (SGR). President Ruto announced that Kenya and Uganda will jointly launch the extension of the SGR from Naivasha to Kampala in January 2026. This long-awaited project is designed to create a seamless transport corridor from Mombasa deep into the East and Central African hinterland, connecting with the pipeline route and significantly lowering logistics costs. “We will coordinate the two governments to improve transport and logistics in our region and be more competitive and enhance collaboration,” Ruto remarked.

Financial and Economic Implications

The Kenya Pipeline Company is one of the nation's most valuable state-owned enterprises. A valuation by Standard Investment Bank (SIB) in October 2025 placed the company's worth at approximately KSh 102 billion. Government estimates from August 2025 suggested a value of around KSh 120 billion, with the Treasury hoping to raise about KSh 100 billion from the sale. For the financial year 2023/24, KPC reported a net profit of KSh 6.9 billion on total equity of KSh 89 billion.

The proceeds from the privatization are intended for budgetary support and to reduce government borrowing, creating more fiscal space. Energy and Petroleum Cabinet Secretary Opiyo Wandayi has previously assured the public that the sale will not lead to fuel price instability, as the Energy and Petroleum Regulatory Authority (EPRA) will continue to regulate tariffs through its established models.

By inviting regional participation, Kenya aims to transform a national asset into a shared regional resource, strengthening economic interdependence and cementing its role as the primary logistics hub for East Africa. The joint ownership is poised to be the most significant restructuring of Kenya's energy infrastructure in decades, marking a new chapter of cooperation between Nairobi and Kampala.