Kenya Launches $825 Million Oil Pipeline IPO as Government Accelerates Privatisation Drive
Kenya has launched the sale of a 65% stake in its state-owned oil pipeline operator, targeting proceeds of 106.3 billion shillings (approximately $825 million) in what is set to become East Africa’s largest initial public offering (IPO) denominated in local currency.
The offering is a central pillar of President William Ruto’s broader strategy to divest from state-owned enterprises and relieve mounting pressure on public finances.
In parallel, the government is reducing its stake in telecommunications giant Safaricom as it seeks alternative sources of funding amid rising debt obligations.
Kenya’s fiscal position has been constrained by elevated public debt, limited capacity to raise additional revenue, and debt servicing costs that absorb roughly 40% of government income.
Finance Minister John Mbadi has underscored the urgency of pursuing new financing approaches, stating: “The traditional methods of financing our budget—taxation and debt—no longer have room. We must turn to innovative financing mechanisms to fund our infrastructure and public service projects.”
The IPO has been priced at nine shillings per share and will remain open until 19 February. Trading is expected to commence on the Nairobi Securities Exchange on 9 March.
Of the 65% stake being offered, 15% has been allocated to oil marketing companies, 5% to employees, and the remaining 45% will be evenly distributed among local retail investors, local institutional investors, East African investors, and foreign investors. Following the listing, the government will retain a 35% shareholding.
Kenyan investment bank Faida is serving as the lead transaction adviser. Market analysts anticipate strong demand for the offering, supported by a rally in Kenyan equities. The MSCI Kenya stocks index has gained more than 50% over the past year.
Eric Musau, head of research at Standard Investment Bank, said the pricing strategy is likely to attract a broad investor base. “While the accessible pricing is set to encourage strong retail participation, we also expect significant interest from institutional investors, particularly those focused on the energy sector,” he noted.
The transaction is expected to surpass the landmark 2008 Safaricom IPO, which raised just over 50 billion shillings, making it the largest IPO in Kenya’s history in local currency terms.
Globally, equity capital markets are showing signs of recovery, with $738.4 billion raised through IPOs in 2025, representing a 15% increase from 2024.
In Africa, six IPOs were recorded last year, raising a combined $882.1 million—the highest total since 2018.
