The Nairobi Securities Exchange (NSE) has welcomed the government’s announcement to explore the potential privatization of the Kenya Pipeline Company (KPC) through an Initial Public Offering (IPO).
In a statement released Thursday, February 6, 2025, the NSE described the move as a transformative step that could deepen Kenya’s capital markets and enhance the country’s appeal to investors.
“The@NSE_PLC welcomes the Government’s strategic decision to explore the potential privatization of the Kenya Pipeline Company (KPC) through an Initial Public Offering (IPO) at the NSE.
“The NSE firmly believes that privatizing state-owned enterprises like KPC will be a transformative step in deepening Kenya’s capital markets, enhancing the country’s attractiveness to investors, and expanding economic participation for all Kenyans,” NSE said in a statement on X.
NSE further emphasized that listing KPC would unlock significant value from government investments and solidify Kenya’s position as a leading regional financial hub.
“This initiative aligns with the Bottom-Up Economic Transformation Agenda championed by H.E. the President, creating opportunities for citizens to own a stake in key national assets and fostering broader wealth distribution.
“Further, listing KPC on the NSE will enable the Government to unlock greater value from its investments while strengthening Kenya’s position as a leading regional financial services hub,” the statement read.
Government’s privatization plan
The privatization plan was made by National Treasury Cabinet Secretary John Mbadi on Thursday, February 6, 2025, during a ceremony where KPC presented an interim dividend cheque of Ksh3 billion for the half-year ending December 2024.
The dividend payment brings the total dividends paid by KPC to the National Treasury in the last 12 months to KES 10.5 billion.
“We believe that KPC should realize the benefits that come with listing on the stock exchange,” said Mbadi.
He cited Safaricom and KenGen as examples of state-owned enterprises that have seen significant growth following public listings.
“Listing will be a good idea, especially as KPC expands into the region. It will provide much-needed liquidity and capital for expansion and diversification into LPG. Kenyans will have a chance to own a piece of KPC.”
Expanding regional influence
As part of its growth strategy, KPC is working towards establishing a trading hub for petroleum and petroleum products in Mombasa.
This initiative is expected to bolster the regional oil and gas industry.
Additionally, Mbadi confirmed the government’s commitment to winding down the Kenya Petroleum Refinery Limited (KPRL) and integrating its assets into KPC.
Meanwhile, Director General of Public Investments and Portfolio Management, Lawrence Kibet, highlighted that the Government-Owned Enterprises (GOE) Bill 2024 is currently under review by the Attorney General’s office.
The bill aims to grant state firms greater autonomy, eliminate bureaucratic hurdles, and enhance public return on investment.
KPC’s financial performance
KPC has demonstrated strong financial performance, reporting a profit before tax of Ksh10.1 billion in 2023-24, up from Ksh7.6 billion the previous year.
Board Chair Faith Boinett credited this growth to operational efficiency and diversification, including investments in fibre optic networks and LPG.
“KPC remains steadfast in its commitment to regional competitiveness. We are proud to hold a 90% stake in fuel transportation to Uganda and are on the brink of securing a similar share in Rwanda,” Boinett said.
In line with its environmental sustainability efforts, KPC has undertaken extensive reforestation initiatives, planting over 600,000 tree seedlings since 2017.
Additionally, its mangrove restoration project in Mombasa has seen more than 440,000 seedlings planted.
Looking ahead
KPC is also set to leverage its fibre optic network to enhance revenue and promote digital transformation.
This initiative supports Kenya’s Vision 2030 by fostering economic growth and bridging the digital divide.
As the government moves forward with its privatization plans, all eyes will be on how the listing of KPC unfolds and the broader impact it may have on Kenya’s capital markets and economic landscape.
