Local health startup Hewatele has secured $20 million (Sh2.5 billion) financing to scale its investments in medical oxygen production in the country.
The funding which comprises debt and part ownership is meant to increase the firm’s oxygen production in the country from two tonnes to 20 tonnes every month.
The construction of the liquid oxygen production facility is expected to enable Hewatele to boost production of medical oxygen and lower prices for its healthcare customers by up to 30 per cent.
Currently, the local market is under the grip of a subsidiary of a London-based multinational, British Oxygen Company (BOC), which operates the country's sole liquid oxygen.
According to Kenya’s Ministry of Health, demand for medical oxygen has more than doubled since the coronavirus pandemic.
This underlines the need for a reliable, cost-efficient access to medical oxygen.
Hewatele founder Bernard Olayo said the project will ensure high-quality oxygen is consistently accessible across different facilities in the region.
He noted that the cost of healthcare oxygen is set to drop by up to 50 per cent from next year, once the company is complete in May 2025.
“Currently Kenya imports 75 per cent of its energy needs making it susceptible to global shocks. Once complete the cost of medical oxygen will reduce from an estimated Sh280 per litre to about Sh150,” said Olayo.
The project is a joint initiative by US partners, Development Finance Corporation, the government of Finland through Finnfund, Grand Challenges Canada, Soros Economic Development Fund and UBS Optimus Foundation of Switzerland.
The company will use the debt and equity funds raised to finance the construction the liquid oxygen production facility outside Nairobi and regional distribution capacity, while doubling its existing capacity at hospital-based sites to produce and distribute medical oxygen using pressurised gas cylinders.
Once complete, the plant will address the rising demand for medical-grade liquid oxygen in healthcare facilities across the region.
“The United States is proud to partner with Hewatele on the opening of this important plant. This facility is a win-win for Kenya. It will improve healthcare in the country and provide jobs in a growing industry,” said US Ambassador Meg Whitman.
“This partnership will enhance the affordable oxygen supply chain and ensure effective emergency preparedness. Finland is proud to support this project, and we expect it to have a significant development impact on Kenya’s healthcare sector,” said Finland Ambasador to Kenya Pirkka Tapiola.
The demand for liquid oxygen in the country has surged, driven by an increase in respiratory-related cases, while supply chains have struggled to keep pace.
The Ministry of Health has acknowledged the issue, attributing the shortage to several factors, including increased consumption, logistical challenges, and the limited number of local suppliers capable of producing and distributing liquid oxygen.
In response, some hospitals have resorted to rationing oxygen, prioritizing critical cases while seeking alternative suppliers.
During the Covid-19 pandemic, the country struggled a lot with the supply of oxygen as hospitals depended on artificial oxygen to help with the treatment of critical cases.
