The International Finance Corporation (IFC) has approved a Sh1.7 billion ($ 12.7 million) senior loan to Avenue Hospital that will fund an expansion drive and enhancement of existing facilities in the country.
The financier, which had first disclosed its intention to lend the hospital the funds last October, said in a statement on Tuesday that it will also 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.
Avenue will also establish five new clinics across the country using the capital injection, the IFC disclosed.
“IFC’s role in the healthcare sector is to complement government efforts to leverage the private sector to help meet the growing demand for quality healthcare. 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,” said Amena Arif, IFC Country Manager for Kenya.
The hospital’s expansion project comes over five years after it opened a seven-floor, 140-bed complex in Nairobi that enabled it to offer improved secondary and tertiary health care services including dialysis, intensive care, advanced laboratory, physiotherapy, and radiology services, while also providing additional wards and operating theatres.
It follows a trend of expansion by private hospitals in Kenya, which are positioning themselves to tap into higher demand for quality healthcare from a growing population of middle-income earners.
“IFC’s investment in Avenue is a testament to the quality of care across our network and the multiple growth opportunities we have in front of us. Avenue and IFC are committed to creating greater access to high-quality healthcare in Kenya and driving continuous improvement in our facilities, technology, and delivery of services across the healthcare continuum,” said Imran Osman, CEO of Avenue Group.
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, which operates medical facilities in emerging markets across South Asia and Africa, took over the hospital in 2019 from Dubai-based Abraaj Holdings, which ran into financial headwinds.
The human health and social work sector in Kenya contributes 1.9 percent of the GDP, with an annual output of Sh232.6 billion in nominal terms as of 2021.
This sector has been attracting funding from private equity funds in recent years due to high growth potential and attractive returns, driven mainly by surging demand from Kenyans who have been frustrated by unreliable services from government-owned facilities.
