By Duncan Miriri

Nairobi ― Kenya began selling a 65% stake in its state oil pipeline company on Monday, seeking to raise 106.3-billion Kenyan shillings ($825m) in what would be East Africa’s biggest initial public offering (IPO) in local currency terms.

The sale is part of President William Ruto’s drive to divest from state companies. The government is also reducing its stake in telecom operator Safaricom.

Burdened by high national debt, limited room to raise taxes and annual repayments that consume 40% of government revenues, Ruto’s administration has sought new funding models.

Divestment strategy

“We must turn to innovative financing mechanisms to fund our infrastructure and public service projects,” finance minister John Mbadi said at the IPO’s launch ceremony.

“The traditional methods of financing our budget, taxation and debt, there is no longer any space.”

Kenya’s finance minister John Mbadi in Nairobi, Kenya, June 12 2025. (Monicah Mwangi/Reuters)

The government priced the Kenya Pipeline Company IPO at 9 shillings per share, the offer documents showed. The shares are scheduled to begin trading on the Nairobi bourse on March 9.

“While the accessible pricing is set to draw in retail participants, we are also likely to see significant interest from institutional energy sector players,” said Eric Musau, head of research at Standard Investment Bank in Nairobi.

Of the total stake on offer, 15% is reserved for oil marketing companies, Mbadi said, 5% for employees and the remainder will be allocated to local retail, local institutional, East African and foreign investors, with each category receiving 20%.

The government will retain a 35% stake. Kenyan investment bank Faida is the lead transaction adviser.

The Kenya Pipeline IPO will be the region’s biggest, surpassing the 2008 Safaricom offering, which raised just more than 50-billion shillings.

In dollar terms, the Safaricom IPO may still rank as the largest, given the weakening of the Kenyan shilling over the past 17 years, LSEG data showed.

The offering comes amid a global rebound in equity capital markets and record highs for stock indexes.

Global equity capital markets activity totalled $738.4bn in 2025, up 15% year on year and the strongest annual performance in four years, according to LSEG.

Kenyan shares surge

Just more than one-fifth of that total was raised by issuers in Europe, the Middle East and Africa.

There were six African IPOs last year, raising a combined $882.1m, 57% more than in the previous year and the most since 2018, LSEG data showed.

The Kenya Pipeline IPO comes amid a sharp rally at the Nairobi Securities Exchange. Kenyan shares have risen more than 50% in the past year, outperforming the MSCI Frontier Africa index.