Nairobi, Kenya | THE INDEPENDENT | Uganda has finalized negotiations with Kenya over Kampala’s participation in the upcoming Preliminary Public Providing (IPO) of the Kenya Pipeline Company (KPC), marking a serious strategic shift in regional energy diplomacy. Strength Minister Ruth Nankabirwa Ssentamu and Approved skilled General Kiryowa Kiwanuka led a excessive-level delegation to Nairobi on Friday to seal Uganda’s entry into KPC’s shareholding structure.
The investment will seemingly be undertaken via the Uganda Nationwide Oil Company (UNOC), the convey-owned entity mandated to retain an eye fixed on Uganda’s commercial pursuits in the petroleum sector. Govt officials described the go as a calculated step to guarantee lengthy-timeframe energy security for Uganda and cement its influence within the role’s petroleum offer chain.
“Right here is a deliberate strategic resolution aimed at strengthening regional energy cooperation and safeguarding national pursuits,” Nankabirwa talked about in remarks to Uganda Radio Community. “The investment will give a select to security of access to petroleum merchandise, toughen affordability, and enhance lengthy-timeframe offer stability for Uganda and the broader role.”
KPC operates higher than 1,700 kilometres of petroleum pipeline infrastructure all over Kenya, transporting refined gas from the port of Mombasa to Nairobi and onward to western Kenya, with offer hyperlinks that somehow feed into Uganda. Uganda imports with regards to all of its refined petroleum merchandise via Kenya’s port and pipeline system.
Consistent with the Ministry of Strength and Mineral Boost, Uganda consumes an estimated 2.3 to 2.5 billion litres of petroleum merchandise every three hundred and sixty five days, with inquire of of growing at roughly 7–10 p.c per three hundred and sixty five days attributable to urbanisation, industrialisation, and a rising vehicle hastily. Any disruption alongside Kenya’s logistics hall, whether or not on the Port of Mombasa, pipeline infrastructure, or substandard-border transit parts, has thunder implications for gas prices and offer stability in Uganda.
Past logistical bottlenecks and international oil ticket shocks rating triggered ticket spikes domestically, pushing petrol and diesel prices beyond UGX 6,000 per litre at top volatility. By acquiring a strategic stake in KPC, Kampala is making an strive to salvage not only financial returns however additionally board-level visibility and influence over infrastructure choices serious to Uganda’s energy lifeline.
Everlasting Secretary on the Strength Ministry, Eng. Irene Pauline Bateebe talked about Kenya’s recognition of Uganda’s strategic characteristic in KPC operations indicators a brand contemporary piece in bilateral cooperation. “Following the IPO, Uganda looks forward to working closely with the Govt of Kenya and other shareholders to advance the corporate’s alternate objectives, give a select to operational efficiencies, and promote regional energy integration,” Bateebe talked about.
Approved skilled General Kiwanuka described the settlement as in step with Uganda’s obligations and ambitions below the East African Neighborhood (EAC), which promotes financial integration, infrastructure harmonisation, and free motion of goods and products and services. Strength cooperation has more and more change into a pillar of EAC integration. The role is currently pursuing joint excessive export infrastructure, including the East African Crude Oil Pipeline (EACOP), which is ready to go Uganda’s excessive from Hoima to Tanzania’s tear for export.
Uganda’s go into KPC enhances these efforts by consolidating its role all over both excessive export and refined product import corridors. Uganda’s investment comes at a pivotal second in its petroleum depart. The country expects first oil manufacturing from the Tilenga and Kingfisher fields in 2026–2027, with top output projected at 230,000 barrels per day. As manufacturing approaches, energy planners rating more and more emphasised the deserve to catch both upstream and downstream infrastructure.
While Uganda will export excessive via Tanzania, this can proceed to depend upon imported refined merchandise except a home refinery becomes operational. The authorities has lengthy proposed a 60,000-barrels-per-day refinery in Hoima to slit import dependence. On the opposite hand, financing and investor negotiations rating confronted delays. Till that refinery materialises, Uganda remains structurally reliant on Kenyan infrastructure for refined gas offer.
Analysts declare taking fairness in KPC could per chance cushion Uganda in opposition to future tariff changes, logistical constraints, and offer disruptions, dangers that rating historically amplified home gas inflation.
While the authorities has framed the investment as strategic, financial analysts existing that IPO participation carries market dangers. The valuation of KPC, pricing of shares, and governance structure put up-list will resolve whether or not Uganda’s stake yields both strategic leverage and commercial returns.
Transparency advocates are additionally seemingly to scrutinise the transaction, in particular the scale of the stake, the funding mechanism, and the anticipated return on investment. UNOC, established below the Petroleum (Exploration, Boost and Manufacturing) Act, 2013, is remitted to retain an eye fixed on convey participation in the petroleum sector on a commercial foundation. Officials rating not but disclosed the scale of the investment or the percentage stake Uganda intends to assemble. Uganda spends billions of bucks every three hundred and sixty five days on petroleum imports, making gas one of many country’s finest import funds and a key driver of inflation.
Consistent with Bank of Uganda recordsdata, petroleum merchandise repeatedly unsuitable among the many tip import categories, exerting stress on international replace reserves. By embedding itself within the role’s finest petroleum pipeline operator, Uganda is effectively converting half of its recurrent import expenditure into an ownership stake in the offer chain.
“This milestone demonstrates Uganda’s dedication to deepening bilateral relatives with Kenya and advancing regional integration,” Approved skilled General Kiwanuka talked about. If efficiently completed, Uganda’s entry into KPC’s ownership structure could per chance redefine the country’s characteristic from passive gas importer to strategic stakeholder in East Africa’s petroleum logistics structure, a shift that will repeat decisive because the role’s energy inquire of of continues to surge.
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