KENYA — The International Finance Corporation (IFC), the private sector financing arm of the World Bank, has approved a senior loan of Sh1.7 billion (US$12.7 million) to Avenue Hospital.
The funds will finance the expansion of the hospital and enhance its existing facilities in the country. The IFC first disclosed its intention to lend the hospital the funds last October.
In a statement, the financier also announced that it will offer advisory services support to Avenue to improve resource efficiency at its facilities.
The funds, once drawn down, will go towards a new wing at Avenue’s Nairobi facility in Parklands, a radiology department at its Kisumu hospital, and installing operating theatre equipment at its Kisumu and Thika branches.
Moreover, Avenue will establish five new clinics across the country using capital injection. IFC will also offer advisory services support to Avenue to improve resource efficiency at its facilities.
The IFC’s investment in Avenue is part of its role in the healthcare sector, which is to complement government efforts to leverage the private sector to help meet the growing demand for quality healthcare.
Amena Arif, IFC Country Manager for Kenya, said, “Our investment in Avenue will increase the availability of healthcare at state-of-the-art facilities across Kenya, enabling more people to get the primary and advanced care they need.”
The hospital’s expansion project comes over five years after it opened a seven-floor, 140-bed complex in Nairobi, which enabled it to offer improved secondary and tertiary healthcare services.
These include dialysis, intensive care, advanced laboratory, physiotherapy, and radiology services, while also providing additional wards and operating theatres.
Private hospitals in Kenya are positioning themselves to tap into higher demand for quality healthcare from a growing population of middle-income earners.
Avenue Group is owned by US private equity fund Evercare Health Fund, which is managed by Texas Pacific Group whose investors include TPG Rise Fund, IFC, BII, DFC, Philips, Medtronic, and the Gates Foundation.
Evercare operates medical facilities in emerging markets across South Asia and Africa and took over the hospital in 2019 from Dubai-based Abraaj Holdings, which ran into financial headwinds.
Private equity funds have been attracted to invest in the health sector in Kenya in recent years, as it has high growth potential and offers attractive returns, driven mainly by surging demand from Kenyans who have been frustrated by unreliable services from government-owned facilities.
In this regard, the International Finance Corporation (IFC) has been playing an important role in investing in healthcare facilities in Kenya and Africa at large, as part of its commitment to improve healthcare services.
IFC has also partnered with Africa Health Business (AHB), a pan-African consulting firm, to strengthen health systems in Africa.
Together, they are bringing together health stakeholders for a special strategy meeting on how the private health sector can help countries in Africa meet their Universal Healthcare Coverage goals.
In addition, IFC has promised to help finance small businesses in healthcare in Africa, through its Africa Medical Equipment Facility, offering local currency loans for the purchase or lease of medical equipment that can improve the quality and reliability of care provided.
IFC has also recently approved a US$28.6 million equity investment in multinational healthcare company Avacare Global to boost access to high-quality, affordable healthcare products and services across Africa.
Moreover, the Co-operative Bank of Kenya has partnered with IFC to improve healthcare delivery by enabling medical centers to acquire advanced equipment at favorable costs.
As private equity funds continue to invest in the sector, it is hoped that the sector will continue to grow and meet the increasing demand for quality healthcare in Africa.
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