• Kenya to fund Nairobi airport expansion using pipeline company IPO proceeds
• Government allocates $155 million seed capital from National Infrastructure Fund
• JKIA expansion aims to ease congestion, boost capacity by 2029

Kenya will use part of the proceeds from the sale of shares in Kenya Pipeline Company (KPC) to finance the expansion of Jomo Kenyatta International Airport (JKIA). President William Ruto said between 15 billion and 20 billion Kenyan shillings ($155 million) from the National Infrastructure Fund will serve as seed capital for the project.

The initiative marks the first major project to be financed through this mechanism based on privatization proceeds. The decision to allocate these funds to JKIA comes as the airport faces mounting capacity constraints. The facility is already operating beyond its limits and requires modernization and expansion to accommodate rising traffic.

By the end of 2025, the airport handled 8.8 million passengers, despite having an official capacity of 8 million. Nairobi plans to expand capacity by an additional 15 million passengers through the construction of a new terminal and a new runway by 2029. The project is expected to raise operational capacity to around 63 aircraft movements per hour, up from 14 currently.

A record IPO to finance infrastructure

The sale of 65% of KPC raised 106.3 billion shillings (about $820 million), making it the largest initial public offering (IPO) ever conducted in East Africa in local currency. The IPO, held from January 19 to February 24, was oversubscribed, reflecting strong demand from institutional investors and significant participation from retail investors, dispelling early concerns about market interest.

The structure of the offering was designed to distribute shares among different stakeholders. Oil marketing companies were allocated 15% of the shares, while employees received 5%. The remainder was offered to local retail investors as well as regional and foreign institutional investors. The state retains a 35% stake and will receive the proceeds from the transaction.

Financing through the National Infrastructure Fund reflects the government’s strategy to mobilize domestic resources for key infrastructure projects, support the development of sovereign investment vehicles, and reduce reliance on external financing.

The operation also forms part of a broader policy of partial divestment from state-owned enterprises led by President Ruto, following the reduction of the state's stake in Safaricom. It also helps deepen Kenya’s financial markets while bringing regional investors into the transaction. Uganda acquired 20.15% of the capital through the IPO, highlighting the strategic importance of KPC for oil flows in East Africa.

Olivier de Souza