Nairobi — Parliament has approved the government's plan to privatize the Kenya Pipeline Company (KPC) paving the way for the government to divest 65 per cent of its shareholding to private investors.

Wednesday's move came after Cabinet approved the partial privatization in July, framing it as a shift toward "democratizing ownership" and unlocking the firm's full commercial potential.

According to government projections, the divestment is expected to raise about Sh100 billion to help address budget shortfalls.

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The approval, contained in Sessional Paper No. 2 of 2025, will see the government retain a 35 per cent shareholding in the company, while the bulk is offered through a public listing.

Treasury Cabinet Secretary John Mbadi has previously defended the plan, arguing that it could quadruple state revenues from KPC while attracting professional management and strengthening governance standards.

"Although it is profit-making, the government gets just about Sh3 billion or Sh4 billion annually as dividends. I am sure that if we privatize KPC and retain just a 35 per cent stake of ownership, we could make up to four or five times more out of that entity," said Mbadi.

Majority Leader Kimani Ichung'wah said the privatization would enhance capital markets, insisting the State would still hold strategic control with its remaining stake.

The approval has faced hurdles including an August suit that saw the High Court suspend the privatization process pending the outcome of legal challenges questioning the procedure and transparency of the plan.

However, in mid-September the High Court lifted those orders, clearing the way for parliamentary debate and the eventual vote.

With Parliament's approval secured, the government now moves to finalize legal and regulatory frameworks.