Parliament Approves Government's 65% Stake Sale in Kenya Pipeline


Parliament has sanctioned the government's initiative to privatize the Kenya Pipeline Company (KPC), thereby allowing the government to divest 65 percent of its ownership in KPC to private investors.

  This decision follows the Cabinet's endorsement of partial privatization in July, which is framed as a transition towards "democratizing ownership" and unlocking the company's full commercial potential. Government forecasts indicate that the divestment is anticipated to generate approximately Sh100 billion to assist in addressing budget deficits. The approval, outlined in Sessional Paper No. 2 of 2025, will enable the government to maintain a 35 percent stake in the company, while the majority will be made available through a public offering. Treasury Cabinet Secretary John Mbadi has previously advocated for the plan, asserting that it could significantly increase state revenues from KPC while attracting professional management and enhancing governance standards. "Despite being profitable, the government receives only about Sh3 billion or Sh4 billion annually in dividends. I am confident that if we privatize KPC and retain a 35 percent ownership stake, we could potentially earn four to five times more from that entity," stated Mbadi. Majority Leader Kimani Ichung’wah remarked that the privatization would "democratize ownership" and strengthen capital markets, emphasizing that the State would still maintain strategic control with its remaining stake. The approval has encountered recent challenges, including a lawsuit in August that led the High Court to suspend the privatization process pending the resolution of legal disputes regarding the procedure and transparency of the initiative. Nevertheless, in mid-September, the High Court lifted those orders, facilitating parliamentary discussion and the subsequent vote. With Parliament's approval now secured, the government is set to finalize the legal and regulatory frameworks.

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