-1.5 C
London
Thursday, December 8, 2022
HomeWorld NewsAvenue Hospital taps Sh1.4bn from IFC for new wing

Avenue Hospital taps Sh1.4bn from IFC for new wing

Date:

Related stories

spot_imgspot_img


Market News

Avenue Hospital taps Sh1.4bn from IFC for new wing


hos

A doctor conducts CT scan on a patient at Avenue Hospital. FILE PHOTO | NMG

The International Finance Corporation (IFC) is set to lend Avenue Hospital Sh1.4 billion ($11.7 million) to fund a new wing at its Nairobi facility in Parklands and refinance existing debt.

The global financier said in disclosures that the proposed funding, which will be in form of senior debt, will also fund an expansion of Avenue’s clinics network and diagnostic capacity.

The hospital’s expansion project comes five years after it opened a seven-floor, 140-bed complex 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 health care from a growing population of middle-income earners.

“The proposed IFC investment seeks to support Avenue Group Limited scale up its secondary and tertiary care offering through enhancements to its diagnostic capacity, expansion of its clinic network, the construction of a new hospital wing at Parklands, Nairobi, and refinance its existing short and long-term debt,” said IFC in the disclosures.

“The total project cost is estimated to be up to $13.4 million (Sh1.62 billion). IFC will provide an A-loan of up to $11.7 million (Sh1.42 billion) and the remaining portion of the project will be funded with the group’s internally generated cash.”

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 operates medical facilities in emerging markets across South Asia and Africa. In Kenya, it has also invested in Nairobi Women’s Hospital, Metropolitan Hospital, Healthlink Management, and Ladnan Hospital.

The fund took over the hospitals in 2019 from Dubai-based Abraaj Holdings, which ran into financial headwinds. Avenue Hospital, which was established in 1976 as a nursing home, now operates three hospitals with a combined bed capacity of 316 in Nairobi, Kisumu, and Thika, as well as 16 outpatient clinics countrywide.

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.

PE firms —a class of investors keen on maximising profits— have also been attracted into the healthcare sector by the potential of relatively quick returns on investment, which match their investment horizons of between seven and 10 years.

[email protected]



Source link

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here