Kenya Eyes Stake in Uganda’s $4BN Oil Refinery as William Ruto Signals Bold Regional Energy Push
Kenya is preparing to invest in Uganda’s multi-billion-dollar oil refinery project in a significant escalation of regional energy cooperation, President William Ruto has announced.
Speaking at the Africa We Build Summit 2026 in Nairobi on Thursday, the Head of State revealed that Nairobi is ready to channel capital into Uganda’s planned refinery in Hoima—an ambitious project valued at approximately $4 billion (Ksh500 billion).
In remarks that underscored growing economic alignment between the two nations, Ruto pointed to Uganda’s recent participation in Kenya’s energy sector as a catalyst for reciprocal investment.
“I want to assure you that the same way you invested in Kenya Pipeline, Kenya is going to invest in your refinery and the future of our resources together,” Ruto said.
The refinery, to be constructed in Hoima, is expected to become one of East Africa’s largest industrial undertakings, aimed at refining crude oil locally and reducing reliance on imported petroleum products.
Ugandan President Yoweri Museveni welcomed the move, describing it as a “noble” step towards unlocking value from the region’s untapped oil reserves.
“This will go a long way in ensuring that we maximise value addition for our resources,” Museveni said, signalling Kampala’s openness to deeper regional partnerships.
KPC IPO Fuels Regional Confidence
The announcement follows the successful partial privatisation of the Kenya Pipeline Company (KPC), which has drawn strong interest from East African investors.
According to Treasury Cabinet Secretary John Mbadi, the Initial Public Offering (IPO) raised Ksh106.7 billion, with robust participation from both local and regional stakeholders.
Kenyan investors acquired the bulk of shares—approximately 7.9 billion—while regional players, including Uganda and Rwanda, collectively secured around 3.8 billion shares. Rwanda’s pension funds emerged among key institutional investors, while Uganda reportedly sought a larger stake before allocations were trimmed due to oversubscription.
Despite the high demand, the Kenyan government retained a controlling 35 per cent stake in KPC, with the broader East African Community bloc now holding about 21.22 per cent—highlighting deepening economic interdependence.
Kenya’s Oil Ambitions Gather Pace
The regional investment push comes as Kenya accelerates its domestic oil programme, particularly in the South Lokichar Basin in Turkana County.
The government is targeting first oil production by December 2026, following renewed momentum in the project after the exit of Tullow Oil. Operations are now being spearheaded by Gulf Energy E&P BV.
Officials say the basin could yield up to 585 million barrels of recoverable oil, with projections indicating potential government revenues of Ksh135 billion once commercial production begins.
The acquisition of a Ksh1.9 billion drilling rig from the United Arab Emirates has further bolstered confidence in Kenya’s upstream capabilities, signalling a broader strategy to position the country—and the wider region—as a competitive energy hub.
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