The Government of Uganda has approved the acquisition of a 20.15 percent strategic stake in the Kenya Pipeline Company (KPC) through the Uganda National Oil Company (UNOC), in a move aimed at strengthening the country’s energy security and protecting its petroleum supply chain.
Speaking during a media briefing, the Minister of Energy and Mineral Development said Cabinet granted approval on Monday, February 23, 2026, for Uganda to participate in KPC’s Initial Public Offering (IPO), as Kenya moves to partially privatize the state-owned pipeline operator.
“The Government of Uganda’s participation in the Initial Public Offering of the Kenya Pipeline Company through the Uganda National Oil Company has secured a 20.15 percent strategic shareholding in the company,” the minister said.
KPC was converted into a public limited company in January 2026 ahead of its listing on the Nairobi Securities Exchange. The Government of Kenya is selling 65 percent of its ordinary shares at an offer price of KES 9.00 per share, while retaining a 35 percent stake.
Uganda’s decision comes amid its heavy reliance on Kenya’s petroleum infrastructure. More than 95 percent of Uganda’s fuel imports pass through the port of Mombasa and are transported via the Kenya Pipeline system, accounting for about 2.96 billion litres annually. The remaining five percent is imported through Tanzania’s ports of Dar es Salaam and Tanga.
UNOC, which became Uganda’s sole importer and supplier of bulk petroleum products under the Petroleum Products Supply Act, 2023, signed a transportation and storage agreement with KPC in May 2024. The agreement allows Uganda to use KPC’s pipeline and storage network to transport fuel from Mombasa to depots in western Kenya for onward delivery into Uganda.
Officials noted that Uganda is a major user of the Kenyan pipeline, accounting for 65 percent of transit volumes and contributing about 35 percent of KPC’s revenues.
The minister said Kenya’s decision to privatize KPC raised concerns about potential shifts in governance toward profit-driven interests, which could affect Uganda’s access to affordable and reliable fuel supplies.
“It was therefore important for the Government of Uganda, through UNOC, to maximise its shareholding in the Kenya Pipeline Company due to the company’s criticality and to secure additional guarantees and protections,” the minister said.
As part of the agreement, Uganda secured several concessions from Kenya, including veto powers over changes in pipeline tariffs, dividend policy, share capital, and major business decisions. Uganda will also appoint at least two directors to KPC’s board.
The minister said these voting rights and concessions would protect Uganda’s strategic interests and ensure the continued security, affordability, and accessibility of petroleum products.
“Therefore, the decision to purchase shares is strategic, and the concessions outlined above provide assurances for the security of supply, accessibility, and affordability of petroleum products in Uganda,” the minister said.
The government also credited President Yoweri Museveni, the Ministry of Finance, and the Attorney General’s office for supporting negotiations that led to the agreement.
The minister called on the public and media to support the initiative, describing it as critical for the country’s economic stability and energy future.
