Kenya’s oldest hospital, the Kenyatta National Hospital (KNH), is hoping to raise Sh17 billion ($181 million) from the private sector to fund the construction of the country’s first paediatric hospital. “We have a growing number of patients seeking specialised care at our facility, so we need to expand and develop our infrastructure to serve them well,” said KNH chief executive officer Lily Tare.

KNH said the 600-bed children hospital will be built at a cost of Sh5 billion. KNH has a 200-bed capacity children ward at the moment which admits about 300 patients. The hospital has for years struggle to finance developmental initiatives as the government allocates just about Sh150 million for such purpose annually.

As it seeks to raise funds for the children’s hospital, it is also targeting the private sector to raise the Sh4 billion needed for its ICT master plan. This will enable the hospital to automate its operations to improve efficiency.

Kenya’s private healthcare sector has been booming in recent times, driven by a growing middle class. Hence, private equity funds have been ramping up investment in the health sector. Swedfund, Sweden’s risk capital company, and The Africa Health Fund (through The Abraaj Group) had  in 2013 announced their investment of $6.5 million in The Nairobi Women’s Hospital, a leading private healthcare provider for women and their families (men and children) in East Africa. Several other investment vehicles have keyed into the impressive growth of the Kenyan healthcare system. But investments have been focused on private organisations.

However, the new public-private partnership conceived by KNH will ensure improvement in the services of the old hospital. After a shortlist of private sector players in healthcare chosen to finance the project is released, they will operate them for a specific period of time before transferring them back to the hospital. While they operate the facility, they will be allowed to keep 60 percent of profits made while 40 percent will be given to KNH.

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