Nairobi – Nigerian billionaire Aliko Dangote has acquired a 25% stake in Kenya Pipeline Company (KPC) for $335 million and pledged a further $1.5 billion to expand its pipeline network, strengthening his ambitions to build an integrated petroleum refining and distribution business across Africa.
According to Business Insider Africa, the acquisition covers approximately 4.5 billion shares in the company, which transports petroleum products across Kenya and supplies neighbouring markets, including Uganda, Rwanda, South Sudan and the Democratic Republic of the Congo.
Dangote announced the acquisition at the Financial Times Africa Summit in London on Wednesday. As reported by Reuters, he said his company had bought the stake to support the movement of petroleum products.
“We bought 25 percent of their pipeline network for their distribution of petroleum products,” Dangote was quoted as saying by Business Daily Africa, citing Bloomberg News.
The investment gives Dangote a significant interest in strategic energy infrastructure as he prepares to establish a major refining operation in East Africa.
Greater influence
On 30 September, the billionaire broke ground on a planned $16 billion refinery at Kenya’s coastal port of Lamu. The facility is expected to have a capacity of 700,000 barrels per day, matching the capacity of his existing refinery near Lagos, Nigeria.
Business Insider Africa reported that the additional $1.5 billion commitment would fund the expansion of KPC’s approximately 1,300-kilometre pipeline network, bringing the combined value of the acquisition and planned expansion to about $1.84 billion.
The pipeline investment could allow Dangote to connect his proposed refinery to existing fuel transportation infrastructure, helping distribute refined petroleum products across East Africa without relying entirely on new distribution networks.
The deal also makes Dangote the second-largest shareholder in KPC, behind the Kenyan government, according to Business Daily Africa. It could give him greater influence over the company’s strategic decisions as he expands his energy interests across the continent.
Infrastructure development
KPC was partially privatised earlier this year when President William Ruto’s administration sold a 65% stake through an initial public offering that raised 106.3 billion Kenyan shillings, or approximately $823 million, according to Business Insider Africa.
The sale formed part of the government’s efforts to raise funds for infrastructure development and reduce reliance on borrowing.
Dangote’s latest investment underscores his strategy of linking petroleum production with storage and distribution infrastructure, positioning Kenya as a potential hub for supplying fuel to markets across East Africa.
The Nigerian industrialist has also offered regional governments a combined 30% stake in the planned Lamu refinery, which is expected to serve Kenya and the wider region when completed.
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Compiled by Betha Madhomu
