Aliko Dangote has acquired a 25 percent stake in Kenya Pipeline Company (KPC) for $327 million, extending his energy business into East Africa’s fuel distribution network as he advances plans for a major refinery in Kenya.
Dangote, founder and chief executive of Dangote Industries, announced the acquisition at an event in London on Wednesday, Bloomberg reported. He did not identify which company within his group made the purchase.
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The deal follows a block trade on the Nairobi Securities Exchange on Monday, October 19, in which 4.5 billion KPC shares, valued at 42.5 billion Kenyan shillings (about $327 million), changed hands. Business Daily reported that the transaction represented approximately 24.76 percent of the company’s issued shares.
State-linked institutions acquired the shares ahead of the company’s listing on the exchange on March 9. The transaction transfers a substantial holding in a key national energy asset to Dangote, whose investments are expanding beyond refining into the infrastructure needed to move fuel across the region.
William Ruto, Kenya’s President, welcomed the sale, describing it as a sign of confidence in the country’s capital markets and an opportunity to raise funds for strategic infrastructure. However, opposition politician Ndindi Nyoro has criticised the transaction and called for greater disclosure about the deal.
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Following the sale, the Kenyan government retains a 35 percent stake in KPC. In comparison, the National Social Security Fund holds about 22.2 percent and Uganda National Oil Company owns 20.15 percent.
KPC operates the pipeline network that transports refined petroleum products from the port of Mombasa to inland markets. Its infrastructure is central to Kenya’s fuel supply and serves wider regional distribution needs, making the stake strategically important as Dangote seeks to expand his presence in East Africa’s energy industry.
The acquisition comes as Kenya advances plans for a Dangote-backed refinery in Lamu. Groundbreaking took place on September 30 for the proposed facility, which is designed to process 700,000 barrels of crude oil a day. Kenyan officials have put the project’s cost at $17 billion, while Dangote has estimated it at $20 billion.
Dangote Group has offered East African governments a combined 30 percent stake in the refinery. Kenya’s proposed 10 per cent share has been valued at about $500 million.
Kenya is also in discussions with Dangote over a pipeline connecting the Turkana oil fields in the country’s north-west to Lamu on the coast. If realised, the project would link domestic crude production to the proposed refinery and export infrastructure.
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Together, the pipeline acquisition and refinery plans point to a broader strategy built around both processing fuel and moving it to market. The KPC stake gives Dangote an interest in an existing distribution network, while the proposed refinery and Turkana pipeline could create additional links between crude production, refining and regional supply.
The scale of the proposed refinery, however, means the project will require substantial financing and coordination among governments and investors. The terms of Kenya’s potential investment, the final ownership structure, and the development of the associated pipeline remain important details as the plans progress.
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Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.
