Gov’t to Sell Stake in Kenya Pipeline Company Through IPO

The government is considering listing Kenya Pipeline Company (KPC) at the Nairobi Stock Exchange through an Initial Public Offering to unlock its value and raise expansion capital. The National Treasury Cabinet Secretary, Mr. John Mbadi revealed this while receiving an interim dividend cheque of Ksh3 billion from KPC for the half-year ending December 2024.

The dividend payment, presented by KPC Board Chair Faith Boinett,  brings the total dividends paid by KPC to The National Treasury in the last 12 months to Ksh10.5 billion. “We have this feeling that KPC needs to realise the benefits that will accrue from a listing at the Stock Exchange,” said Mr Mbadi, citing Safaricom and KenGen among corporates that have reaped big from listing. “Listing will be a good idea especially as KPC expands into the region because it will provide much-needed liquidity and capital for expansion and diversification into LPG.”

As part of its business growth plans and diversification, Kenya Pipeline Company plans to  create a trading hub for receipt, trading and distribution of petroleum and petroleum products in Mombasa, which will be a boost to the regional oil and gas industry. The CS also said The National Treasury would support plans to wind down Kenya Petroleum Refinery (KPRL) and onboarding it into KPC.

Mr Mbadi praised the KPC Board and Management for a stellar financial performance for the year ended June 2024. Recording a Ksh10.5 billion profit is no small feat, he said, adding it reflects operational efficiency, sound management, and dedication to delivering value.

> Kenya Pipeline Upgrades Western Kenya Oil Flow

“Today, as I receive this dividends cheque of Ksh3 billion from the KPC Board, I am reminded of the critical role State corporations play in driving our economic growth and supporting national development goals. State corporations should tighten their corporate governance frameworks to not only enhance their profitability, but also safeguard public resources and build stakeholder confidence,” he added.

KPC has paid a total of Ksh63 billion in tax and dividends over the last 10 years. In 2023-24, KPC posted a Ksh10.1 billion Profit Before Tax (PBT) an increase from the Ksh7.6 billion recorded the prior year.

Mrs Boinett said KPC’s strong financial performance is anchored on efficient operations and diversification into new revenue streams such as Fiber Optic Cables (FOC) and LPG. “KPC remains steadfast in its commitment to regional competitiveness,” Mrs Boinett said. “We are proud to hold a 90% stake in fuel transportation to Uganda and are on the brink of securing a similar share in Rwanda.”

Present at the ceremony was Mr Joe Sang, the Managing Director, KPC, Board Members and senior management.

Mr Lawrence Kibet, the Director General, Public Investments and Portfolio Management, said the Government Owned Enterprises (GOE) Bill 2024 had been passed by the Cabinet and was being reviewed by the Attorney General. The Bill, among others, spells the “commercial principles and the procedure for establishing a Government Owned Enterprise” and establishes the governance structures.

Mr Kibet said the Bill aims to ensure that the public gets a worthy Return On Investment from public-owned institutions by granting them autonomy , rid them of needless  bureaucracy, thereby affording them a competitive edge in the marketplace.

> Kenya Airways Woos Government Officers With Premium Services