𝘛𝘩𝘦 𝘕𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘈𝘴𝘴𝘦𝘮𝘣𝘭𝘺 𝘩𝘢𝘴 𝘢𝘱𝘱𝘳𝘰𝘷𝘦𝘥 𝘚𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘗𝘢𝘱𝘦𝘳 𝘕𝘰. 2 𝘰𝘧 2025 𝘳𝘦𝘨𝘢𝘳𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘱𝘳𝘪𝘷𝘢𝘵𝘪𝘻𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘒𝘦𝘯𝘺𝘢 𝘗𝘪𝘱𝘦𝘭𝘪𝘯𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 (𝘒𝘗𝘊) 𝘓𝘪𝘮𝘪𝘵𝘦𝘥, 𝘵𝘩𝘦𝘳𝘦𝘣𝘺 𝘨𝘳𝘢𝘯𝘵𝘪𝘯𝘨 𝘢𝘱𝘱𝘳𝘰𝘷𝘢𝘭 𝘧𝘰𝘳 𝘵𝘩𝘦 𝘱𝘰𝘭𝘪𝘤𝘺 𝘧𝘳𝘢𝘮𝘦𝘸𝘰𝘳𝘬 𝘨𝘰𝘷𝘦𝘳𝘯𝘪𝘯𝘨 𝘵𝘩𝘦 𝘱𝘳𝘪𝘷𝘢𝘵𝘪𝘻𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘴𝘵𝘢𝘵𝘦 𝘤𝘰𝘳𝘱𝘰𝘳𝘢𝘵𝘪𝘰𝘯.

This follows the consideration and adoption of the Joint Report of the Departmental Committee on Energy and Select Committee on Public Debt and Privatization on the consideration of the Sessional Paper No. 2 of 2025 on the Proposed Privatization of Kenya Pipeline Company (KPC) Limited.

Members of the National Assembly further adopted the following policy resolution relating to privatization of the Kenya Pipeline Company.

1. 𝐒𝐮𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐟𝐨𝐫 𝐩𝐫𝐢𝐯𝐚𝐭𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐊𝐞𝐧𝐲𝐚 𝐏𝐢𝐩𝐞𝐥𝐢𝐧𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐲 𝐋𝐢𝐦𝐢𝐭𝐞𝐝

Kenya Pipeline Company Limited is a strategic state corporation of critical national and regional significance, serving as the backbone for petroleum transportation and storage in Kenya and neighbouring countries; and is suitable for privatization.

𝟐. 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐬𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐢𝐧𝐠 𝐩𝐫𝐞- 𝐚𝐧𝐝 𝐩𝐨𝐬𝐭-𝐈𝐏𝐎

𝘛𝘩𝘦 𝘎𝘰𝘷𝘦𝘳𝘯𝘮𝘦𝘯𝘵 𝘳𝘦𝘵𝘢𝘪𝘯𝘴 𝘯𝘰𝘵 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘵 𝘵𝘩𝘪𝘳𝘵𝘺-𝘧𝘪𝘷𝘦 𝘱𝘦𝘳𝘤𝘦𝘯𝘵 𝘰𝘧 𝘴𝘩𝘢𝘳𝘦𝘴 𝘰𝘧 𝘒𝘦𝘯𝘺𝘢 𝘗𝘪𝘱𝘦𝘭𝘪𝘯𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 𝘓𝘪𝘮𝘪𝘵𝘦𝘥 𝘢𝘯𝘥 𝘮𝘢𝘺 𝘱𝘳𝘪𝘷𝘢𝘵𝘪𝘻𝘦 𝘯𝘰𝘵 𝘮𝘰𝘳𝘦 𝘵𝘩𝘢𝘯 65 𝘱𝘦𝘳𝘤𝘦𝘯𝘵 𝘰𝘧 𝘨𝘰𝘷𝘦𝘳𝘯𝘮𝘦𝘯𝘵 𝘰𝘸𝘯𝘦𝘳𝘴𝘩𝘪𝘱 𝘪𝘯 𝘵𝘩𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺.

𝟑. 𝐀𝐯𝐚𝐢𝐥𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐨𝐟 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐜𝐲

On valuation, the Privatization Commission: Ensures that the valuation of the company is contained in the prospectus;

- Publishes a separate citizen-friendly IPO valuation report that should be produced and publicized for the general public; and,

- Undertakes a valuation of the actual financial and asset position of the KPC and submit a report to the National Assembly. This should also take into account the future potential of the business in compliance with section 31 of the Privatization Act, 2005.

𝟒. 𝐏𝐨𝐬𝐭 𝐀𝐮𝐝𝐢𝐭 𝐏𝐫𝐨𝐜𝐞𝐬𝐬

The Office of the Auditor General audits the processes relating to privatization of Kenya Pipeline Company Limited to ensure value for money and submit a report to the National Assembly within six months of completing the processes.

𝟓. 𝐒𝐚𝐟𝐞𝐠𝐮𝐚𝐫𝐝𝐢𝐧𝐠 𝐚𝐟𝐟𝐞𝐜𝐭𝐞𝐝 𝐩𝐚𝐫𝐭𝐢𝐞𝐬 𝐚𝐧𝐝 𝐤𝐞𝐲 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬

In respect of the employees of Kenya Pipeline Company Limited, the Privatization Commission ensures that the employees of Kenya Pipeline are included in an Employee Share Ownership Plan.

𝟔. 𝐎𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐥𝐢𝐦𝐢𝐭𝐬 𝐟𝐨𝐫 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬

The Privatization Commission takes steps to safeguard against excessive concentration of shares in a single entity or related parties, and shall set a maximum ownership limit for any one shareholder to help preserve broad-based ownership, promote market competitiveness, and protect national and energy security interests.

𝟕. 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐬𝐭𝐬 𝐚𝐧𝐝 𝐫𝐢𝐬𝐤𝐬

The Privatization Commission ensures that all liabilities (debt and credit) and risks affecting the valuation of KPC are comprehensively assessed, transparently disclosed, and factored into the transaction valuation before proceeding with the IPO, including:-

- Pending lawsuits amounting to Kshs. 5.75 billion;

Unresolved compensation claims worth Kshs. 3.8 billion by residents of Makueni County due to historical grievances linked to pipeline operations.

- Loss of approximately Kshs. 400 million in the Mzima pipeline project due to stalled execution and procurement lapses, a garnishee order of Kshs. 485 million in favour of M/s. Zakhem International following contractual disputes over the Line V project.; and

- The potential loss of public funds amounting to Kshs. 192.6 million after M/s. Asharami Synergy took over the LPG facility despite prior investment by KPC.

𝟖. 𝐓𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭 𝐨𝐟 𝐬𝐮𝐛𝐬𝐢𝐝𝐢𝐚𝐫𝐢𝐞𝐬

A clear statement be included in the prospectus on how Kenya Petroleum Refineries Limited, a subsidiary of Kenya Pipeline Company Limited, has been financially evaluated and factored in the valuation of Kenya Pipeline Company Limited.

𝟗. 𝐏𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭 𝐨𝐟 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧 𝐚𝐝𝐯𝐢𝐬𝐨𝐫𝐬

The procuring and engaging of transaction advisers should be done transparently and competitively, and the cost of the transaction (currently set at Kshs. 100 million) should not deviate from reasonable market rates, and approval from the National Treasury should be sought before any increase.

𝟏𝟎. 𝐔𝐬𝐞 𝐨𝐟 𝐩𝐫𝐨𝐜𝐞𝐞𝐝𝐬

The proceeds projected to be Kshs. 100 billion be utilized in either development expenditure, pending bills, or liability management.

𝟏𝟏. 𝐏𝐞𝐫𝐢𝐨𝐝𝐢𝐜 𝐫𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐨𝐧 𝐩𝐫𝐢𝐯𝐚𝐭𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬

The Privatization Commission reports to the National Assembly each stage of the implementation of the process of privatizing Kenya Pipeline Company Limited for continuous oversight and accountability.

𝟏𝟐. 𝐄𝐥𝐢𝐠𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐨𝐟 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬

The Privatization Commission implements a minimum level for participation by Kenyan citizens, ensuring broad local ownership from all walks of life including, and in as far as possible, the youth, women, persons with disabilities and that the process is aligned with national economic empowerment objectives in accordance with section 29 of the Privatization Act, 2005.

𝟏𝟑. 𝐒𝐚𝐟𝐞𝐠𝐮𝐚𝐫𝐝𝐢𝐧𝐠 𝐜𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐨𝐧 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐞𝐭𝐫𝐨𝐥𝐞𝐮𝐦 𝐒𝐞𝐜𝐭𝐨𝐫

𝘛𝘰 𝘱𝘳𝘦𝘷𝘦𝘯𝘵 𝘵𝘩𝘦 𝘦𝘮𝘦𝘳𝘨𝘦𝘯𝘤𝘦 𝘰𝘧 𝘢 𝘮𝘰𝘯𝘰𝘱𝘰𝘭𝘺 𝘢𝘯𝘥 𝘴𝘢𝘧𝘦𝘨𝘶𝘢𝘳𝘥 𝘤𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘪𝘰𝘯, 𝘵𝘩𝘦 𝘱𝘳𝘪𝘷𝘢𝘵𝘪𝘻𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘒𝘦𝘯𝘺𝘢 𝘗𝘪𝘱𝘦𝘭𝘪𝘯𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 𝘓𝘪𝘮𝘪𝘵𝘦𝘥 𝘣𝘦 𝘴𝘵𝘳𝘶𝘤𝘵𝘶𝘳𝘦𝘥 𝘵𝘰 𝘭𝘪𝘮𝘪𝘵 𝘵𝘩𝘦 𝘮𝘢𝘯𝘥𝘢𝘵𝘦 𝘰𝘧 𝘵𝘩𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 𝘵𝘰 𝘵𝘳𝘢𝘯𝘴𝘱𝘰𝘳𝘵𝘪𝘯𝘨 𝘢𝘯𝘥 𝘴𝘵𝘰𝘳𝘪𝘯𝘨 𝘱𝘦𝘵𝘳𝘰𝘭𝘦𝘶𝘮 𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘴 𝘢𝘯𝘥 𝘨𝘶𝘢𝘳𝘢𝘯𝘵𝘦𝘦 𝘵𝘩𝘢𝘵 𝘒𝘦𝘯𝘺𝘢 𝘗𝘪𝘱𝘦𝘭𝘪𝘯𝘦 𝘊𝘰𝘮𝘱𝘢𝘯𝘺 𝘓𝘪𝘮𝘪𝘵𝘦𝘥 𝘴𝘩𝘢𝘭𝘭 𝘯𝘰𝘵 𝘷𝘦𝘯𝘵𝘶𝘳𝘦 𝘪𝘯𝘵𝘰 𝘵𝘩𝘦 𝘪𝘮𝘱𝘰𝘳𝘵𝘢𝘵𝘪𝘰𝘯 𝘰𝘳 𝘴𝘢𝘭𝘦 𝘰𝘧 𝘱𝘦𝘵𝘳𝘰𝘭𝘦𝘶𝘮 𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘴 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘱𝘳𝘪𝘰𝘳 𝘢𝘱𝘱𝘳𝘰𝘷𝘢𝘭 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘊𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘪𝘰𝘯 𝘈𝘶𝘵𝘩𝘰𝘳𝘪𝘵𝘺 𝘰𝘧 𝘒𝘦𝘯𝘺𝘢, 𝘌𝘯𝘦𝘳𝘨𝘺 𝘢𝘯𝘥 𝘗𝘦𝘵𝘳𝘰𝘭𝘦𝘶𝘮 𝘙𝘦𝘨𝘶𝘭𝘢𝘵𝘰𝘳𝘺 𝘈𝘶𝘵𝘩𝘰𝘳𝘪𝘵𝘺, 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘕𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘈𝘴𝘴𝘦𝘮𝘣𝘭𝘺.

The House is expected to continue debate on the Privatisation Bill 2025 which provides the legal framework for Privatisation.