Kenyan firm Hewatele gets funding to expand medical oxygen plants

A Kenyan company that supplies medical oxygen to some of the country's hospitals has received a boost from the Soros Economic Development Fund (SEDF).

Hewatele, which was founded in 2013 by Dr Bernard Olayo, received about $20 million, which will help it expand its operations.

The company will use the debt and equity funds raised to finance the construction of a 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.

SEDF, the impact investment arm of the Open Society Foundations, will invest $4 million to help address persistent shortages and inadequacies in the supply of oxygen to medical facilities across the country.

“Oxygen in hospitals in sub-Saharan Africa is about five times more expensive by volume than it is in Europe and the United States. Building local production capacity will help solve this inequality and save lives,” said Muthoni Wanyeki, executive director of Open Society-Africa, in a press statement.

It was during the Covid-19 pandemic that the demand for oxygen in hospitals increased and exposed the gaps in the supply of oxygen to the country's hospitals.

The local market is currently dominated by the subsidiary of a London-based multinational, which operates the only other liquid oxygen plant in the country.

Hewatele has taken a new approach to the distribution of medical oxygen, reducing costs and addressing supply issues by building oxygen plants close to major hospitals, rather than trucking in supplies from plants in more remote industrial areas.

This investment is part of a portfolio of investments by the Open Society Foundations aimed at expanding global access to affordable, high-quality public health products and technologies, and the development of locally-based research, development, distribution, and manufacturing.

These investments build on two decades of support to improve access to medicines, advocacy and global policymaking.

“As a catalytic social impact investor focused on direct impacts and longer-term, systemic change, SEDF sees the investment in Hewatele as an important commitment to strengthening Africa’s rapidly expanding healthcare sector,” said Georgia Levenson Keohane, chief executive for SEDF.

Finnfund, a Finnish government development agency, and UBS Optimus Foundation, a Swiss-based philanthropic fund, will also invest in Hewatele as part of the financing package, which also includes a $10 million loan from the US International Development Finance Corporation and a $1.1 million loan from Grand Challenges Canada, a Canadian government development initiative.