By Benadeta Mwaura - Reporter
Kenya, July 15, 2026 - The Kenyan government is set to earn KSh22.5 million every month from leasing public land hosting the multi-billion-shilling Taifa Gas liquefied petroleum gas (LPG) terminal in Mombasa, creating a new long-term revenue stream while supporting the country's ambition of becoming a regional clean energy hub.
The monthly income will come from a lease agreement covering approximately 30 acres of public land at the Dongo Kundu Special Economic Zone, where Tanzanian energy firm Taifa Gas is constructing what is expected to become Africa's largest LPG storage and handling terminal. The lease translates to approximately KSh270 million annually in revenue for the government.
The project, valued at approximately KSh17 billion (US$130 million), is among the largest private investments in Kenya's energy sector and is expected to transform the country's LPG supply chain by increasing storage capacity, improving product availability and reducing the cost of transporting cooking gas across the region.
Construction of the terminal follows the resolution of a prolonged legal dispute after the Environment and Land Court upheld the project's approvals, allowing Taifa Gas to proceed with development at the strategic Dongo Kundu Special Economic Zone.
The court ruled that the company had complied with all environmental and statutory requirements necessary for the investment.
Once completed, the facility will have the capacity to store 30,000 metric tonnes of LPG, making it the largest such installation on the continent. The terminal is expected to significantly reduce reliance on smaller storage facilities and ease supply bottlenecks that have periodically contributed to fluctuations in cooking gas prices.
The investment also aligns with Kenya's broader clean cooking strategy, which seeks to increase household adoption of LPG as an alternative to charcoal and firewood. The government has set ambitious targets to expand access to cleaner cooking fuels as part of efforts to reduce deforestation, lower household air pollution and support the country's climate commitments.
Beyond the lease income, the project is expected to generate wider economic benefits through employment opportunities during construction and operations, increased cargo traffic through the Port of Mombasa and enhanced regional trade.
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Kenya is positioning the facility as a strategic distribution hub capable of supplying LPG not only to the domestic market but also to neighbouring countries including Uganda, Rwanda, Burundi, South Sudan and eastern Democratic Republic of Congo.
The project forms part of a growing pipeline of foreign direct investments that have strengthened Kenya's investment profile in recent years.
Government reports previously identified the Taifa Gas investment among the flagship projects that helped Kenya surpass its foreign direct investment targets, alongside major investments in manufacturing and pharmaceuticals.
For the government, the lease arrangement demonstrates how strategic public assets can generate recurring non-tax revenue while attracting private capital into infrastructure development.
The expected monthly earnings of KSh22.5 million will provide a steady income stream over the duration of the lease while supporting Kenya's long-term objective of becoming East Africa's leading energy logistics and distribution centre.