Kenya Pipeline Company (KPC) Plc just handed two of Uganda’s top bureaucrats a board pack and a vote on who runs Kenya’s most important piece of energy infrastructure.
That’s one way to read the July 28th appointment of Ramathan Ggoobi, Uganda’s treasury permanent secretary, and Irene Pauline Bateebe, his counterpart at the energy ministry, to KPC’s board.
The other way to read it: Uganda finally got what it paid for.
When KPC floated 65 percent of itself on the Nairobi Securities Exchange earlier this year, Uganda’s state oil company showed up with roughly $150 million and a list of demands.
Kenya, worried the initial public offering (IPO) might flop without a marquee anchor investor, said yes to all of them.
Uganda walked away with 20.15 percent of the company, at least two board seats, veto rights over pipeline tariffs, veto rights over hiring and firing the CEO, and approval power over dividends, the business plan and anything touching share capital.
Bankers call this a “strategic stake.” Everyone else might call it a leveraged buyout of influence, minus the leverage.
The timing could not be more awkward for Kenya, or more convenient for Uganda.
KPC has been without a permanent chief executive since April, when Joe Sang quit along with Kenya’s petroleum principal secretary and its energy regulator’s boss.
The trio was arrested over an alleged $60 million substandard-fuel scandal involving a tanker that arrived carrying more trouble than diesel.
Kenyan directors reportedly stalled the CEO search rather than run it without Uganda’s nominees in the room, since Kampala’s new veto meant any pick could be sent back anyway. Problem solved: the nominees are now in the room.
Why did Uganda want this so badly? Because it has spent fifty years finding out what happens to a country with no port when the country that owns the port has a bad week.
Kenya’s 2008 post-election violence briefly cut the road and rail arteries carrying fuel to Kampala.
A 2020 trade squabble saw Nairobi throw up barriers against Ugandan exports. More than two billion litres of refined fuel reach Uganda every year, almost all of it through Kenya, and Kampala has never fully forgiven the fact that it doesn’t control a single mile of that route.
Uganda has hedged before. Its crude oil, once destined to flow through Kenya to the port of Lamu, now heads the other way entirely, through the East Africa Crude Oil Pipeline, across Tanzania, a routing decision that had less to do with Tanzanian charm than with Ugandan distrust of Nairobi.
But that pipeline is for oil Uganda plans to sell abroad. For the diesel and petrol Uganda actually burns, there’s no Tanzanian bypass, just Kenya’s pipes, forever.
If you can’t build around the monopoly, the next best option is to join its board.
Uganda tried the confrontational route first and it went about as well as these things usually do.
In 2023 Kenya’s regulator refused to license Uganda’s state oil firm to import fuel on its own terms, prompting Kampala to sue Nairobi at the East African Court of Justice over transit-access rights, plus a side accusation that Kenya’s State House had leaned on the regulator directly.
Presidents William Ruto and Yoweri Museveni smoothed it over in mid-2024 with a deal letting Uganda import independently while still using Kenya’s pipeline, plus a promise, first made in 1995 and repeatedly shelved since, to finally build a pipeline extension from Eldoret to Kampala.
Uganda’s parliament has now lined up $2 billion in financing from the trading house Vitol, partly earmarked for that extension and for buying still more of KPC.
Some Kenyans are unnerved by all this, grumbling online that a foreign government now has a formal say over a Kenyan state company, wherever its head office sits.
Others point out that a bit of outside scrutiny might be exactly what an outfit that just watched its CEO get arrested needs.
Both takes miss the real story, which is less about sovereignty than about pricing risk correctly.
Uganda didn’t take over Kenya’s pipeline. It just stopped paying, year after year, for a dependency it had no say in, and started buying the say instead.
