Investors support Hewatele in its efforts to bring affordable medical liquid oxygen to healthcare facilities in East Africa

Hewatele, a medical oxygen producer in Kenya, has secured a 20 million USD funding package from Finnfund, DFC (the U.S. International Development Finance Corporation), SEDF (Soros Economic Development Fund), UBS Optimus Foundation and Grand Challenges Canada. Hewatele will use the debt and equity funds raised to finance the building of a liquid oxygen(LOX) manufacturing facility some 20kms in the outskirts of City of Nairobi, together with regional distribution capacity at key strategic regions within Kenya, while also doubling its existing capacity at hospital-based sites to produce and distribute medical oxygen using pressurized gas cylinders (GOX).

Hewatele was founded by a group of doctors in 2013 in Kenya, headed by Dr Bernard Olayo and for past 4 years led by CEO, Dr Zulfiqar Wali. They manufacture and distribute medical oxygen through six operational Pressure Swing Adsorption (“PSA”) plants strategically positioned within Kenya and Uganda. The Kenyan medical oxygen market is characterised by inadequate and expensive supply as well as skewed availability of Life Saving Medicinal Oxygen as concentrated in urban areas. “The arise of the COVID pandemic made everyone around the world aware of the importance of oxygen supply”, says Johanna Raehalme, Finnfund’s Head of Origination in Africa. “We are happy to add yet another important investment in our healthcare portfolio and see that the increased awareness of oxygen will ensure market demand for Hewatele going forward.”

According to Kenya’s Ministry of Health, demand for medical oxygen has increased significantly since the coronavirus pandemic, from 410 tons per month to 880 tons per month. As a result, Kenyan hospitals frequently experience unpredictable deliveries, higher prices, and expensive transportation costs for medical oxygen. Due to the high production costs, fragmented delivery and storage options, medicinal oxygen is typically eight to ten times more expensive in sub-Saharan Africa than it is in Europe and North America. The construction of oxygen production facility is expected to enable Hewatele to boost production of medical oxygen by least 20 tons per day, which is expected to reduce the cost to its rural and urban healthcare customers by up-to 30%.

Georgia Levenson Keohane, chief executive officer of SEDF, said: “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.”

Maya Ziswiler, CEO Optimus Foundation, said: “UBS Optimus Foundation invests in organizations that demonstrate clear impact and innovative and scalable business models. That’s why we were early supporters of Hewa Tele, as we see the impact and value of their business model and are now pleased to make a longer-term commitment for them to reach even more undersupplied rural and urban communities in East Africa with affordable and life-saving medical oxygen.”

By providing enhanced, affordable supply of medical oxygen, this project is anticipated to have a significant developmental impact on Kenya’s healthcare sector. Improving access to oxygen and administering oxygen can reduce child mortality from pneumonia by 35% and lessen foetal distress when given to women during pregnancy, saving lives.

More information:
Johanna Raehalme, Head of Origination in Africa, johanna.raehalme@finnfund.fi, +254 798 862 768

Media contact:
Communications and Marketing Manager Valpuri Mäkinen, valpuri.makinen@finnfund.fi, +358 50 3842105

See Finnfund’s other investments in healthcare 

About Finnfund
Finnfund is a Finnish development financier and impact investor. We build a sustainable future and generate lasting impact by investing in businesses that solve global development challenges. We invest 200–250 million euros in 20–30 companies in developing countries each year. Our focus sectors include renewable energy, sustainable forestry, sustainable agriculture, financial institutions, and digital infrastructure and solutions. Today Finnfund’s investments, commitments, and investment decisions total about 1.22 billion euros, half of them in Africa. The company has 100 employees based in Helsinki and Nairobi. For more information, please visit www.finnfund.fi

About SEDF
The Soros Economic Development Fund (SEDF) is the impact investment of the Open Society Foundations. SEDF deploys patient, risk-tolerant and catalytic capital to advance OSF’s commitment to sustaining vibrant and inclusive democracies across the globe. Founded in 1997, SEDF has committed over $520M in debt, equity and guarantee investments into businesses, funds, platforms and nonprofits across the globe and across sectors that advance the mission of the Foundations. SEDF’s current investment portfolio includes $395M in committed capital across 38 investments. https://www.soroseconomicdevelopmentfund.org/

About UBS Optimus Foundation
UBS Optimus Foundation is an independent grant-making foundation that offers UBS clients a platform to use their wealth to drive positive social and environmental change. The Foundation selects programs that improve children’s health, education and protection, ones that have the potential to be transformative, scalable and sustainable as well as programs tackling environmental and climate issues. https://www.ubs.com/global/en/ubs-society/philanthropy/optimus-foundation.html