Kenya Clears Sh18 Billion Public-Private Partnership Tenders for Hospital Projects

Pwani University and the Meru County government have won approval to invite tenders for two healthcare facilities, including a teaching and referral hospital and a specialised cancer centre, worth a combined Sh18.37 billion. New disclosures show that the planned Sh9 billion Pwani Teaching and Referral Hospital has been approved for tendering, paving the way for the selection of a private investor for a public-private partnership arrangement. The Treasury has also cleared tendering for the planned construction of a Sh9.4 billion cancer centre at Meru Level Five Referral Hospital under a public-private partnership model. Another Sh4 billion medical training complex at Moi Teaching and Referral Hospital in Eldoret is already at the tender stage, with the aim of identifying a company to develop the facility.

The development is expected to increase the hospital’s capacity for medical training and student accommodation. Public-private partnerships are expected to play a major role in closing infrastructure gaps, with the National Treasury continuing to develop key policy instruments, including regulations under the Public-Private Partnerships Act 2021 and related guidelines and procedure manuals. Key targeted projects include the Moi Teaching and Referral Hospital and the Meru Cancer Care Centre Project. The Pwani hospital, which will be affiliated with Pwani University, is planned to include hospital facilities, a medical research centre, a tropical medicine centre, telemedicine services, student accommodation and staff housing.

The Pwani project will be implemented through a public-private partnership, with Pwani University acting as the contracting authority. The proposed contract will run for 30 years, during which the private partner is expected to finance and develop the facility before handing it over to the public authority. The hospital is expected to improve access to referral services in the Coast region while supporting medical training and research. In Meru, the proposed cancer centre will provide specialised services, including chemotherapy, radiotherapy, medical imaging and laboratory services, operating under a proposed 20-year public-private partnership overseen by Meru County.

The 50-bed Meru facility could reduce the need for patients in Meru and neighbouring counties to travel to major hospitals in Nairobi and other cities for cancer diagnosis and treatment. Meanwhile, the Pwani hospital will rely on government funds under an availability-payment model, where the government makes regular payments to a private-sector partner under a public-private partnership arrangement. These projects are part of the Government’s wider plans to attract private investment in healthcare infrastructure, with remaining developments progressing through feasibility studies, procurement and financing arrangements.

Why This Matters

The mobilization of private capital through structured public-private partnerships represents a fundamental shift in how large-scale social infrastructure is procured and delivered across the region. By utilizing models such as availability payments and long-term concessions spanning two to three decades, public authorities can tap into external financing and operational efficiencies while retaining ultimate ownership. This mechanism relieves immediate pressure on public budgets and shifts construction and lifecycle maintenance risks to private investors.

Integrating advanced clinical capabilities, such as specialized oncology services and tropical medicine research, directly addresses geographic disparities in healthcare access. Patients in regional hubs like Meru and the Coast will experience reduced travel burdens and lower out-of-pocket costs for specialized care. Concurrently, embedding medical training facilities within these infrastructure projects ensures a sustained talent pipeline for the national health sector, aligning capital expenditure with human capital development.

Opportunities

• Financiers and Lenders: Opportunities to structure long-term debt facilities and project finance packages for concessions backed by government availability payments.
• Contractors and Developers: Commercial openings to execute large-scale engineering, procurement, and construction mandates for specialized medical infrastructure.
• Technology Integrators: B2B prospects to supply and maintain advanced digital health systems, telemedicine infrastructure, and specialized medical imaging equipment.
• Facility Operators: Long-term operational roles in managing complex teaching hospitals, student housing, and specialized diagnostic centers post-construction.

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