The planned privatisation of Kenya Pipeline Company is set to cost the government an estimated Sh2.99 billion, with advisers and professional consultants emerging as the biggest beneficiaries of the landmark transaction.
At the centre of the process is Faida Investment Bank, the lead transaction adviser, which will earn advisory fees of Sh98.6 million, in addition to a success fee equivalent to one per cent of the gross proceeds raised, plus 16 per cent value added tax.
While the final success fee will depend on the amount mobilised through the offer, the fixed advisory component alone positions Faida among the top earners in the deal.
Legal and accounting advisers also feature prominently in the cost structure. TripleOKLaw LLP, incorporating G and A Advocates, has been appointed legal adviser at a fee of Sh31.9 million, while PricewaterhouseCoopers, acting as reporting accountant, will receive Sh13.45 million.
Another advisory linked cost is borne by Image Registrars, engaged as registrar and data processing agent. Of its total allocation of Sh70.35 million, advisory fees account for Sh28.3 million, with the balance classified as reimbursable expenses tied to execution of the offer.
Public relations consultancy firm Apex Communications has also been allocated Sh42.13 million, underscoring the emphasis placed on investor communication and public messaging ahead of the listing.
Taken together, the identifiable advisory and consultancy fees, excluding variable success fees and reimbursable costs, amount to approximately Sh214.4 million. This highlights why advisers are among the biggest winners of the initial public offer, regardless of how the market responds to the sale.
By contrast, receiving banks Stanbic, KCB and Co operative Bank are set to share a combined Sh16.3 million, while regulatory charges payable to the Capital Markets Authority and the Nairobi Securities Exchange are capped at Sh31.5 million.
The single largest cost item overall is the placement fee, set at 1.5 per cent of the offer and estimated at Sh1.59 billion, benefiting sponsoring and placing brokers. Placement fees are paid to intermediaries for placing shares with investors during new securities issuances and are capped at 1.5 per cent under the Capital Markets Licensing Regulations.
The government expects to raise about Sh106.3 billion from the sale of a 65 per cent stake in Kenya Pipeline Company, providing a rare source of non debt financing amid a large fiscal year 2025 26 funding gap driven by delayed external support.
The transaction forms part of a broader strategy to monetise state assets and fund the budget without increasing public debt. It involves the sale of 11.81 billion existing shares at Sh9 per share, making it the largest offer ever to hit the Nairobi bourse.