Oil & Gas

The Ugandan government plans to use part of a proposed $2 billion loan backed by global oil trader Vitol to acquire a stake in the Kenya Pipeline Company (KPC), according to a finance ministry brief submitted to parliament. The move is tied to Kenya’s plan to divest up to 60% of KPC through an initial public offering (IPO), a process confirmed by President William Ruto as part of a broader privatisation drive.

Kenya aims to raise about KES 60 billion ($460 million) from the IPO while retaining a strategic state interest. President Ruto has framed KPC as a “regional facility,” encouraging Ugandans and other East Africans to invest. He stressed that shares would be available to both public institutions and private citizens across the region, signalling a push for cross-border ownership of critical infrastructure.

Uganda’s Ministry of Finance said the borrowing would support key oil-sector investments, including acquiring a stake in KPC, expanding fuel storage, and developing pipeline and refinery infrastructure. The state-owned Uganda National Oil Company (UNOC) will undertake the borrowing, with repayments expected to be secured against revenues from fuel sales and future oil projects as Uganda prepares to begin crude production later this decade.

KPC operates over 1,700 miles of pipeline linking the port of Mombasa to Nairobi and western Kenya, handling roughly 90% of Uganda’s petroleum imports. Ugandan officials say owning a stake would give the country greater control over its fuel supply logistics, especially as global financing for fossil fuel projects tightens amid the energy transition.