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The government has set March 31, 2026, as the deadline for the privatisation of the Kenya Pipeline Company (KPC), aiming to empower ordinary Kenyans with ownership in a strategic enterprise and boost national revenue.
The Kenyan government has officially set March 31, 2026, as the deadline for the privatisation of the Kenya Pipeline Company (KPC). This significant announcement, made through a notice by the Privatisation Commission on Tuesday, October 14, 2025, marks a critical step in the government's economic strategy.
The decision follows the Cabinet's approval of the privatisation method and the subsequent endorsement by the National Assembly on Wednesday, October 1, 2025. The process will be guided by the provisions of the Privatization Act, 2005, which mandates the Commission to implement Kenya’s privatisation program.
KPC, incorporated on September 6, 1973, and operational since 1978, is a state corporation wholly owned by the Government of Kenya, with 99.9% of shares held by the National Treasury and 0.1% by the Ministry of Energy and Petroleum. It plays a crucial role in the national and regional energy sector, transporting petroleum products across Kenya and to landlocked neighbouring countries such as Uganda, Rwanda, the Democratic Republic of Congo, Northern Tanzania, Burundi, and South Sudan.
The privatisation of KPC has been a subject of discussion for decades, with previous attempts dating back to a Cabinet-approved programme in December 2008. President William Ruto had initially targeted an Initial Public Offering (IPO) for KPC by September 2025, indicating a slight delay in the current timeline.
The privatisation will be executed through an Initial Public Offering (IPO) of shares on the Nairobi Securities Exchange (NSE). The National Assembly approved this method in compliance with Section 25(a) of the Privatization Act, 2005. The government intends to sell a 65 percent stake in KPC, retaining a 35 percent shareholding.
The Privatisation Commission, under the Privatization Act, 2005, is responsible for formulating, managing, and implementing the privatisation programme. The Act outlines several benefits of privatisation, including improving infrastructure and public service delivery, reducing demand for government resources, generating additional government revenues, and broadening the base of ownership in the Kenyan economy.
The Privatisation Commission views this as a strategic opportunity to empower ordinary Kenyans to own a stake in one of the country's most profitable and strategic enterprises. It is also expected to promote inclusive economic growth, strengthen transparency, and enhance corporate governance through listing on the NSE.
Treasury Cabinet Secretary John Mbadi has previously stated that privatising KPC and retaining a 35 percent stake could quadruple state revenues from the entity, while attracting professional management and improving governance standards.
The privatisation is expected to unlock KPC's full potential, enhance operational efficiency and innovation, and reduce government borrowing. Proceeds from the sale are earmarked to support key development priorities and fund the 2025/2026 national budget. Listing on the NSE is also anticipated to deepen Kenya's capital markets, improve liquidity, and increase investor participation.
However, the process may face challenges, including currency volatility risks and political sensitivities, as highlighted in an analysis of KPC's IPO. There is also a need for clarity on timelines, costs, and safeguards to ensure a smooth transition and protect public interest.
While the government projects significant revenue generation from the sale, the exact valuation and market sentiment will play a crucial role in achieving the KES 100 billion target. The long-term impact on fuel costs and energy security, while expected to be positive due to increased efficiency, will require careful monitoring.
Stakeholders will be closely watching the implementation phase, particularly the transparency of the IPO process and how the government addresses any potential concerns regarding the sale of a strategic national asset. The selection of advisors for the IPO and the market's reception to the offering will be key indicators of success.
The privatisation of KPC is part of a broader government initiative to restructure state-owned enterprises, reduce direct state involvement in commercial entities, and attract private sector participation. This aligns with the government's policy shift towards economic liberalisation.
