Uganda Acquires 20.15% Stake in Kenya Oil Pipeline -

‎Government has approved Uganda’s participation in the Initial Public Offering (IPO) of the Kenya Pipeline Company (KPC), securing a 20.15% strategic shareholding through the Uganda National Oil Company (UNOC) in a move aimed at strengthening the country’s energy security.

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‎The decision was approved by Cabinet and comes less than three years after the Government of Uganda monopolised the importation of petroleum products.

‎Following the amendment of the Petroleum Products Supply Act, 2023, UNOC became the sole importer and supplier of bulk petroleum products—including diesel, petrol, Jet A-1 and kerosene—destined for the Ugandan market

‎In May 2024, UNOC signed a Transportation and Storage Agreement with KPC to utilise the Kenyan firm’s pipeline infrastructure for the importation of petroleum products through the Port of Mombasa. The products are transported via the pipeline to depots in western Kenya, from where Uganda’s Oil Marketing Companies (OMCs) collect their allocations for distribution within Uganda.

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‎Uganda’s petroleum market is currently supplied mainly through imports via Mombasa, supplemented by shipments through Dar es Salaam and Tanga ports in Tanzania. Imports through Kenya account for over 95% of Uganda’s monthly petroleum demand, estimated at about 2.96 billion litres annually, with the remaining 5% coming through Tanzania.

‎Government figures also show that 65% of transit volumes through the Kenya Pipeline system are destined for Uganda, meaning Uganda contributes approximately 35% of KPC’s total revenues through pipeline and storage usage.

‎While KPC was previously wholly owned by the Government of Kenya, Uganda relied largely on bilateral relations to ensure uninterrupted supply. However, the planned privatisation of KPC raised concerns that governance would increasingly prioritise profit-driven private investors, potentially affecting tariff stability and supply security.

‎“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 to manage the inherent conflict arising from the divested shareholding,” Minister of Energy and Mineral Development Ruth Nankabirwa told reporters on recently

‎As part of negotiations, the Government of Kenya granted Uganda a number of strategic concessions, including:

‎A 20.15% shareholding in KPC

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‎Veto power on any changes to pipeline tariffs

‎Appointment of at least two directors to the KPC Board

‎Veto power on revisions to the dividend policy

‎Veto power on material changes to the company’s business plan

‎Veto power on amendments to the Memorandum or Articles of Association

‎“These voting rights and concessions provide satisfactory guarantees and protections for the Government of Uganda’s strategic interests of security of supply, affordability, and accessibility,” Nankabirwa said.

‎She added that the decision to acquire shares in KPC was strategic, and that the agreed safeguards will ensure the continued security, affordability and accessibility of petroleum products for Uganda.