NAIROBI, Kenya – Kenya Pipeline Company (KPC) will operate under strict controls once it is privatised, following new conditions approved by the National Assembly to prevent potential abuse of its strategic role in the petroleum sector.
Lawmakers last week endorsed a framework that restricts KPC’s functions to the transportation and storage of petroleum products. Any move by the company to import or sell fuel will now require approval from regulators and Parliament.
A schedule attached to the Sessional Paper on KPC’s privatisation stipulates that the company “shall not venture into the importation or sale of petroleum products without prior approval from the Competition Authority of Kenya (CAK), Energy and Petroleum Regulatory Authority (EPRA), and the National Assembly.”
The approval clears the way for the government to offload part of its stake in the firm through an initial public offering (IPO) at the Nairobi Securities Exchange, while retaining at least 35 per cent ownership. The Treasury projects the transaction could raise about Sh100 billion.
Safeguards for Transparency and Public Interest
To ensure transparency, MPs directed that a comprehensive valuation of KPC’s assets and financial position be carried out and presented to Parliament before the IPO launch.
The valuation report must also be included in the IPO prospectus and simplified for public understanding.
The House further demanded an explanation of how Kenya Petroleum Refineries Limited (KPRL)—a KPC subsidiary—has been assessed and integrated into the company’s overall valuation.
“The valuation should reflect the firm’s future potential in line with Section 31 of the Privatisation Act, 2005,” the schedule adds.
The Auditor-General has been mandated to review the entire privatisation process and table a report in Parliament within six months of completion, confirming value for money.
Employee and Citizen Participation
Lawmakers also directed that KPC employees be included in the share sale through an employee share ownership plan.
In addition, a portion of shares will be reserved for Kenyan citizens—particularly youth, women, and persons with disabilities—to encourage broad-based ownership.
To prevent dominance by a few investors, the Privatisation Commission must set limits on the number of shares that can be held by one entity or related parties.
The commission has also been instructed to hire transaction advisers through open and competitive procedures, with costs capped at Sh100 million unless the Treasury approves a higher figure.
Proceeds from the privatisation will be channelled to development projects, payment of pending bills, or settlement of liabilities, ensuring that the funds are used for public benefit.
