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IFC targets Kenya healthcare through Sh11bn equity fund

The International Finance Corporation (IFC) is scouting for investments in Kenya’s healthcare sector through a Sh11 billion ($107 million) Dutch-based private equity fund it backs.

The IFC, the World Bank’s private lending arm, says the Investment Fund for Health in Africa (IFHA II) will finance “acquisition and integration of targeted healthcare services businesses in East and Southern Africa.”

The Fund, which also counts Pfizer, African Development Bank and European Investment Bank as its backers, has investments in healthcare provider AAR Group as well as CarePay Limited, the originators of the M-Tiba platform.

A spokesperson of the IFC told the Business Daily that some funds from IFHA II would be invested in Kenya, but declined to give specifics including whether AAR is a likely get more funding.

“The Project is expected to increase access to affordable, quality healthcare and specialist services in East and Southern Africa, where there is an undersupply and increasing demand across all income group,” IFC says in its disclosures.

“Through the construction and set up of new clinics and hospitals, this Project will go a long way in increasing and improving the much-needed healthcare infrastructure. The key acquisition targets are in East and Southern Africa.”

The IFHA first invested in Kenya in 2010 when it spent Sh750 million to purchase a 20 per cent stake in Healthcare provider AAR Group, even as its management said it intended to grow its stake to over 60 per cent in the short-term.

Three years later, the IFC independently made an investment of Sh340 million in AAR while IFHA increased its stake with an injection of an unknown amount of money.

IFHA typically invests between Sh75.5 million and Sh1.1 billion with its preferred targets being expansion of hospitals and clinic chains, setting up of drug manufacturers, and health insurance.

It also finances firms producing affordable HIV/Aids testing solutions.

AAR, which has presence in Kenya, Uganda and Tanzania, will spend at least Sh2.5 billion to put up the new hospital on Kiambu Road with a capacity of over 100 beds.

The firm has 19 branches in Kenya.

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