The Government of Kenya’s plan to offload a 65% stake in Kenya Pipeline Company Limited (KPC) through an initial public offering (IPO) by March 2026 faced setbacks this week, leading to an extension of the offer period by one week to give investors more time to subscribe.  

Market analysts, including Old Mutual Investment Group Uganda (OMIG), have expressed concerns about the valuation, suggesting that the shares could be overpriced by as much as 49%. They have advised investors to refrain from buying until a possible price correction makes the offer more appealing. 

Table 1: Analysis Opposing the Pricing 

However, not all analysts opposed the pricing. Transaction advisors, including Faida Investment Bank and Dyer & Blair Investment Bank, supported the KSh 9.00 offer price, arguing that KPC’s monopoly position in critical fuel transport infrastructure justifies a premium valuation.  

By offloading the 65% stake, the Government aims to raise funds to lessen public debt pressure, comply with economic reform plans linked to the International Monetary Fund programme, and improve efficiency through private ownership as part of the broader privatisation of state-owned enterprises.  

Meanwhile, prominent Kenyan public interest litigator Okiya Omtatah Okoiti has filed a constitutional petition seeking to prevent the planned privatisation of KPC by having the process declared unconstitutional. He argues that KPC is a profitable state asset, having recorded approximately KSh 6.87 billion in profit, and already provides dividend income to the Government, meaning its sale would result in the loss of future public revenue. 

Omtatah further argues that the privatisation is driven by conditions linked to Kenya’s programme with the International Monetary Fund (IMF), which he claims undermine the country’s economic independence. IMF programmes commonly promote privatisation to strengthen fiscal stability.  His petition is also grounded in procedural and legal concerns, including alleged inadequate public participation, improper approvals, and broader violations of constitutional and statutory requirements.  

KPC is a strategic national asset that oversees fuel transportation across the country, and fuel infrastructure is considered critical national infrastructure. Selling it could impact Kenya’s energy security, its control over energy, and the well-being of future generations.   

The privatisation commission, transaction advisors, and investment banks will need to revisit their strategies and adapt to the unforeseen setbacks. The results of both the IPO and the ongoing court proceedings will assess investor confidence, public trust in government decisions, and Kenya’s capacity to balance fiscal requirements with the safeguarding of strategic national assets.