Gov’t mulls listing Kenya Pipeline on NSE through IPO

The government is considering the option of listing the Kenya Pipeline Company (KPC) on the Nairobi Stock Exchange (NSE) through an Initial Public Offering (IPO).

This was revealed by Treasury Cabinet Secretary John Mbadi on Thursday after receiving a Ksh.3 billion interim dividend cheque from KPC Board Chair Faith Boinett for the half-year ending December 2024.  

The cheque was presented at the KPC’s headquarters in Nairobi, bringing the total dividends paid by the pipeline company to the exchequer over the past 12 months to Ksh.10.5 billion.

“We have this feeling that KPC needs to realise the benefits that will accrue from a listing at the Stock Exchange,” said Mbadi, citing Safaricom and KenGen as among the corporates that have reaped huge benefits from listing at the NSE.

“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, Kenyans will have a chance to own a piece of KPC.”

As part of its business growth and diversification strategy, KPC is considering the establishment of a trading hub in Mombasa for the receipt, trading and distribution of petroleum products, which will benefit the regional oil and gas industry.

According to Mbadi, the Treasury will support plans to wind down the Kenya Petroleum Refinery (KPRL) and integrate it into KPC. The CS likewise acknowledged the prolonged delay in dissolving KPRL and assured that the exchequer, in collaboration with the Ministry of Energy, would work to ensure a smooth transition within this financial year.

Mbadi also congratulated the KPC Board and Management for a stellar financial performance for the year ended June 2024.

“Recording a Ksh.10.5 billion profit is no small feat. It speaks volumes about the company's operational efficiency, sound management, and dedication to delivering value to its stakeholders,” he said.

“The National Treasury remains committed to supporting KPC and other State corporations in their efforts to contribute meaningfully to Kenya’s fiscal sustainability and economic prosperity.”

KPC has paid a total of Ksh.63 billion in tax and dividends over the last 10 years. Between 2023 and 2024, KPC posted a Ksh.10.1 billion Profit Before Tax (PBT) an increase from the Ksh.7.6 billion recorded the prior year.

Boinett, on her part, noted that 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. 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,” she said.

“This demonstrates our strategic efforts to cement our leadership in the regional energy and logistics sector. I extend our gratitude to the National Treasury for their efficiency and collaboration, which have been instrumental in driving KPC’s success.”