Three Kenyan doctors have secured Sh1.8 billion funding from international investors for a hospital to be built in Nairobi’s Ridgeways estate.
The hospital, named Iso Health Limited and sponsored by three Kenyan doctors, is set to receive Sh577 million from the International Finance Corporation (IFC), which is part of the consortium of financiers.
The balance is to be provided by private equity firms Abraaj Group and Africa Health Fund (AHF).
Iso is set to offer treatment and care for heart diseases, targeting the mass market. The investors have assembled a team of cardiac specialists, operating under an unnamed Indian hospital brand.
The two-storey hospital will have 130 beds with a total floor area of 7,926 square metres.
According to disclosure documents by the IFC, the hospital will be built on 2.5 acres of land to be bought from a Dr Githegi, who is among the doctors sponsoring the project. Construction of the hospital is expected to be complete by end of 2017.
The investment in Iso is the latest in Kenya where investors, including private equity firms, are putting up new hospitals and expanding existing facilities to capture increasing demand for healthcare by the growing middle class.
Equity Group has also announced its funding of healthcare institutions around the country that will be operated by healthcare professionals and branded “Equity Afia”.
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Gertrude’s Children’s Hospital in 2013 invested Sh500 million to set up a new building at its Muthaiga branch, raising its bed capacity to 103 from the previous 83.
Other hospitals that have made new investments in the past few years include Nairobi and the Aga Khan hospitals that have put up cancer treatment centres.
Aggressive expansion of private hospitals has been linked to a rising spend on healthcare by the country’s middle class as government hospitals suffer from congestion and frequent strikes.
This has seen charitable trusts and private equity firms increase their investments in the healthcare market, with a view to promoting social welfare and earning returns.
Research firm Business Monitor International (BMI) says growth in Kenya’s healthcare sector is being driven by a rising population and increased awareness of preventative healthcare.
The investors are also eyeing rising cases of illnesses such as malaria and diseases of the respiratory systems.
“In comparison to many other African markets… Kenya offers more commercial promise and a more stable overall business environment,” BMI said in a research note.
The research firm says the local healthcare sector has been growing at double digits, with revenues rising 11.8 per cent to Sh212 billion last year compared to Sh190.3 billion in 2014.