Local health startup Hewatele has secured $20 million (Sh2.5 billion) in financing to significantly scale up its medical oxygen production in Kenya. This investment, which includes both debt and equity, is aimed at increasing Hewatele’s oxygen production capacity from two tonnes to 20 tonnes per month. The funding will support the construction of a new liquid oxygen production facility, expected to enhance production and reduce costs for healthcare providers by up to 30 percent.
Currently, the local market is dominated by the British Oxygen Company (BOC), a subsidiary of a London-based multinational that operates the country’s sole liquid oxygen supply. This monopoly underscores the urgent need for more local and cost-effective sources of medical oxygen, especially given that demand has more than doubled since the COVID-19 pandemic, according to Kenya’s Ministry of Health.
Hewatele’s founder, Bernard Olayo, emphasized that the new facility will ensure consistent access to high-quality oxygen across various healthcare facilities in the region. With the project expected to be completed by May 2025, he anticipates a significant reduction in the cost of medical oxygen, potentially lowering prices from Sh280 per litre to about Sh150. This price reduction is crucial for improving healthcare affordability in Kenya.
The project is a collaborative effort involving several international partners, including the US Development Finance Corporation, the Finnish government through Finnfund, Grand Challenges Canada, Soros Economic Development Fund, and UBS Optimus Foundation from Switzerland. These partnerships are vital in financing the construction of the facility and expanding regional distribution capacity, as well as doubling existing production at hospital-based sites.
US Ambassador Meg Whitman and Finland’s Ambassador to Kenya, Pirkka Tapiola, have both praised the project. Ambassador Whitman highlighted the facility’s dual impact on healthcare improvement and job creation, while Ambassador Tapiola underscored the project’s role in enhancing the affordable oxygen supply chain and ensuring effective emergency preparedness.
This investment comes at a critical time as Kenya faces challenges with oxygen supply chains and increased demand for medical-grade liquid oxygen, driven by rising respiratory-related cases. The new facility aims to address these issues, providing a reliable and cost-effective solution to support healthcare delivery across the region.
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