President William Ruto has signed into law the Special Economic Zones (Amendment) Bill, 2026, in a move expected to strengthen Kenya’s push for industrialisation and unlock investments in the oil and gas sector.
The Bill, sponsored by Majority Leader, Kimani Ichung’wah, was introduced in the National Assembly on March 12, 2026, and passed with amendments on April 21, 2026, pursuant to Article 109(3) of the Constitution.
The new law expands the scope of Special Economic Zones (SEZs) to cover upstream and midstream petroleum operations following a resolution by both Houses of Parliament adopting a joint report on the Field Development Plan and Production Sharing Contracts for Blocks T6 and T7 in the South Lokichar Basin in Turkana County.
National Assembly resolved to extend the SEZ legal and regulatory framework to petroleum operations while granting investors fiscal incentives and concessions aimed at attracting large-scale capital investments in the sector.
What is new under Special Economic Zones Act?
The amendments also broaden the SEZ framework beyond petroleum to include agro-processing zones, manufacturing zones, mineral and natural resource-based zones as well as advanced technology-driven production zones.
Lawmakers said the changes are intended to align the SEZ framework with the operational realities of capital-intensive projects by providing a minimum 10-year licence tenure subject to annual compliance audits.
The law further limits the long-term licensing benefit to investors committing at least Sh5 billion, a threshold aimed at ensuring that only serious investors benefit from the incentives offered under the SEZ regime.
In addition, the law harmonises tax incentives applicable to entities operating in oil and gas zones under the Special Economic Zones framework.
The enactment of the law is expected to boost investor confidence, support industrial growth and accelerate the commercialisation of Kenya’s petroleum resources.
