Uganda Cabinet approves 20.15% stake purchase in Kenya Pipeline Company

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The Government has approved the acquisition of a 20.15 per cent strategic stake in the Kenya Pipeline Company (KPC) through the Uganda National Oil Company (UNOC), in a move to secure Uganda’s fuel supply and protect national energy interests.

Addressing journalists at Uganda Media Centre in Kampala on Tuesday, February 24, 2026, energy minister Ruth Nankabirwa said the Cabinet, a day earlier, approved Uganda’s participation in KPC’s Initial Public Offering (IPO) ahead of its listing on the Nairobi Securities Exchange (NSE).

The Government of Kenya is partially privatising KPC by selling 65 per cent of its issued shares at an offer price of nine Kenya Shillings per share, while retaining 35 per cent ownership.

KPC was converted into a public limited company in January 2026 to facilitate the transaction.

L–R: Ruth Nankabirwa Ssentamu, Minister of Energy and Mineral Development, and Chris Baryomunsi, Minister for ICT and National Guidance, address the media at the Uganda Media Centre, Kampala, on February 24, 2026. (Photo by Bridget Ahurira)

Nankabirwa said Uganda’s decision to invest in KPC was informed by the company’s critical role in the country’s fuel supply chain.

Under amendments to the Petroleum Products Supply Act 2023, UNOC is the sole importer and supplier of bulk petroleum products, including diesel, petrol, Jet A-1 and kerosene, destined for the Ugandan market.

These products are distributed locally through licensed oil marketing companies (OMCs).

In May 2024, UNOC signed a Transportation and Storage Agreement with KPC, enabling Uganda to use the Kenyan firm’s pipeline infrastructure to handle fuel imports through the port of Mombasa.

The products are transported via pipeline to depots in western Kenya, where Ugandan OMCs collect their allocations for onward delivery into the country.

Currently, more than 95 percent of Uganda’s petroleum imports (approximately 2.96 billion litres annually) are routed through Kenya, with the remaining volumes imported through the Tanzanian ports of Dar es Salaam and Tanga.

According to the minister, 65 per cent of transit volumes through the KPC system are destined for Uganda, contributing about 35 percent of KPC’s revenues through pipeline and storage utilisation.

“During the period when KPC was wholly owned by the Government of Kenya, Uganda relied on strong bilateral relations to ensure reliable and secure supply,” Nankabirwa said.

“However, the privatisation of KPC is likely to shift governance towards profit-driven interests of private investors,” she added.

She noted that Uganda’s participation in the IPO was necessary to secure additional guarantees and manage potential risks arising from the change in ownership structure.

Under negotiations between the two governments, Uganda secured several concessions. These include a 20.15 per cent shareholding, veto powers over changes to pipeline tariffs, revisions to dividend policy, material alterations to the company’s business plan, and any increase or reduction in share capital that could dilute Uganda’s stake.

Uganda will also have veto rights over amendments to the company’s Memorandum and Articles of Association and the appointment of at least two directors to KPC’s board.

Nankabirwa said the voting rights and protections provide satisfactory guarantees for Uganda’s strategic interests, particularly in ensuring security of supply, affordability and accessibility of petroleum products.

She thanked President Yoweri Museveni, as well as the finance minister and the Attorney General, for supporting the negotiations that led to the agreement.

“The IPO and subsequent trading of KPC shares on the NSE are of significant strategic importance to the country, both from an energy security and commercial perspective,” she said.

The minister called on the public and the media to support the initiative, describing it as a milestone in strengthening Uganda’s energy security and deepening regional cooperation in the oil and gas sector.