Cabinet Approves UNOC Acquisition of 20.15% Stake in Kenya Pipeline Company Uganda strengthens regional energy security with strategic investment in KPC IPO to safeguard fuel supply and price stability.

The Uganda National Oil Company (UNOC) has secured a 20.15 percent strategic shareholding in the Kenya Pipeline Company (KPC) following Cabinet’s approval. 

 The deal marks a significant milestone in Uganda’s efforts to safeguard its energy security, reinforce regional integration, and strengthen its commercial interests in the regional petroleum supply chain.

According to a media briefing by Ruth Nankabirwa,  the Minister of Energy and Mineral Development, Cabinet on Monday, February 23, 2026, approved the Government of Uganda’s participation in KPC’s Initial Public Offering (IPO) through UNOC. 

The approval follows high-level engagements between the Government of Uganda and the Government of Kenya regarding KPC’s listing on the Nairobi Securities Exchange (NSE).  

KPC is being partially privatized by the Government of Kenya through a listing on the Nairobi Securities Exchange (NSE). 

The Kenyan government converted KPC into a public limited company in January 2026 and is offering 11,812,644,350 ordinary shares at KES 9.00 per share, representing 65 percent of the issued shares to local, regional, and international investors. The Government of Kenya will retain a 35 percent stake. 

The acquisition is seen as a strategic intervention to protect Uganda’s energy supply chain. Uganda currently imports over 95 percent of its petroleum products through the port of Mombasa in Kenya, with the remainder routed through the Tanzanian ports of Dar-es-Salaam and Tanga. 

The country’s annual petroleum demand stands at approximately 2.96 billion litres, translating to a monthly demand of about 240 million litres, and continues to grow at an estimated annual rate of 7 percent. 

UNOC, designated under the Petroleum Products Supply Act 2023 as the sole importer and supplier of bulk petroleum products into Uganda, relies heavily on KPC’s pipeline infrastructure to transport fuel from Mombasa to depots in western Kenya. 

From there, Ugandan oil marketing companies lift and distribute the products into the domestic market. 

In May 2024, UNOC signed a Transportation and Storage Agreement with KPC to formalize this arrangement and to utilise Kenya’s pipeline and storage infrastructure for efficient handling and transportation of fuel imports.

Notably, 65 percent of the transit volumes handled by the KPC pipeline system are destined for Uganda, and Uganda contributes about 35 percent of KPC’s revenues through its utilization of the pipeline and storage facilities. 

Previously, KPC was wholly owned by the Government of Kenya. However, the shift toward privatization raised concerns that future governance could prioritize profit-driven interests of private investors, potentially affecting tariffs, dividend policies, and broader operational decisions.

To mitigate these risks, Uganda negotiated strategic protections alongside its equity stake. 

Through engagements between the two governments, backed by the President of Uganda, the Ministry of Finance, Planning and Economic Development, and the Attorney General, several key concessions were secured.

These concessions include a guaranteed 20.15 percent shareholding, veto power over changes to pipeline tariffs, the right to appoint at least two directors to the KPC Board, veto power on revisions to the company’s dividend policy, veto power over material changes to the business plan, protection against dilution through veto power on changes in share capital, and veto authority over alterations to the Memorandum and Articles of Association.

Nankabirwa emphasized that these safeguards provide satisfactory guarantees and protections to secure Uganda’s interests in energy security, affordability, and accessibility of petroleum products. 

The IPO and subsequent trading of KPC shares on the NSE were described as being of significant strategic importance to Uganda, both commercially and from an energy security perspective, reinforcing bilateral cooperation with Kenya and advancing regional integration under the East African Community framework. 

The Minister called upon the media and the Ugandan public to support the initiative, describing it as a move aimed at strengthening national interests, enhancing regional energy cooperation, and ensuring long-term stability in petroleum supply.