Kenya’s healthcare landscape is poised for a major transformation with the construction of East Africa’s first modern medical liquid oxygen plant.
Hewatele, a Kenyan medical oxygen producer founded in 2013, is building the facility in Tatu City, near Nairobi, with production slated to begin in June 2025.
This ambitious project is backed by a $20 million investment from Finnfund and other international investors, including DFC (the U.S. International Development Finance Corporation), SEDF (Soros Economic Development Fund), UBS Optimus Foundation, and Grand Challenges Canada.
The funds will not only finance the LOX facility but also regional distribution capacity and the doubling of existing GOX production at hospital-based sites.
Currently, Kenyan hospitals struggle with limited medical oxygen availability, relying heavily on expensive imported oxygen.
The healthtech startup has been instrumental in improving this situation, particularly during the COVID-19 pandemic, by increasing local production.
The new plant, built by Nikkiso Cosmodyne using Japanese technology, will produce 20 tonnes of medical liquid oxygen daily, significantly increasing availability and reducing costs.
“The construction is progressing on schedule. I visited India and Turkey with our technical team to learn more about the plant’s construction process,” said Zulfiqar Wali, CEO of Hewatele. Mr Wali emphasized the crucial role of Finnfund in the project, stating, “Finnfund’s financing and expertise in African markets have been vital to us.”
The plant’s components began arriving in Kenya in December 2024, with full-scale production expected by June 2025.
This new facility will address the challenges posed by gaseous oxygen, including high cylinder costs and low production capacity.
Liquid oxygen production is five times cheaper than gaseous oxygen. Hewatele anticipates selling liquid oxygen at KSh 150–170 per liter, approximately half the current market rate of KSh 230–250, while remaining profitable.
“Our priority is to improve the availability of oxygen, so that hospitals are no longer forced to move patients to other hospitals where oxygen is readily available. The new plant will increase the availability of medical liquid oxygen substantially and simultaneously reduce costs,” Mr Wali explained.
The liquid oxygen will be stored on-site and delivered to hospitals via a specialized refrigeration and pipe system, directly to patients’ bedsides.
This marks a significant upgrade from existing, outdated plants with low production capacity.
The firm stated its commitment to saving lives extends beyond its core business. During the pandemic, the company prioritized oxygen delivery, even to customers with financial difficulties.
They also offer affordable “breathing packages,” including oxygen mask sets, to ensure hospitals have the necessary equipment for patient care.
Looking ahead, Hewatele plans to expand into neighboring countries.
While the new plant is expected to meet Kenya’s demand, the company will maintain some older gaseous oxygen plants as reserve units and for remote regions.
They also see opportunities to repurpose existing plants for industrial gas production.
Mr Wali sees significant potential for growth in Uganda, Tanzania, and especially Ethiopia, despite challenges like exchange restrictions and conflict.
“The population of Ethiopia is 120 million, and the energy costs are one fourth of the cost level in Kenya. Our key challenges are exchange restrictions and the civil war. On the other hand, the war increases the need for medical oxygen. I see Ethiopia as a really interesting opportunity for expansion,” Mr Wali said.
He also anticipated a new financing round within two years to accelerate expansion.
A questionnaire survey conducted by Hewatele and Finnfund underscored the company’s positive impact. 91% of the 230 respondents, medical and administrative staff at health centers, said they couldn’t easily find a comparable alternative to Hewatele, and 72% found Hewatele’s rates more affordable.
One respondent even reported a dramatic reduction in labor ward mortality due to reliable oxygen deliveries.
“The arise of the COVID pandemic made everyone around the world aware of the importance of oxygen supply,” said 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.”
