Commercial Projects

Moderna Halts Plans for Sh62bn Kenya Vaccine Factory

The US firm had signed a deal with Kenya for the mRNA vaccine facility.

Updated on

April 15, 2024

moderna covid vaccine — Moderna delivered 807 million Covid-19 doses in 2021. PHOTO | REUTERS

Moderna, Inc. has halted its plans to build a Sh62 billion vaccine factory in Nairobi, citing concerns about dwindling demand for Covid vaccines post-pandemic.

In March 2022, the US drugmaker signed a deal with Kenya for the construction of a local factory to manufacture affordable therapeutics and vaccines.

The facility, planned for Tatu City, would have been Moderna’s first mRNA vaccine factory in Africa. It would be used for the production of drug substances, although it could be expanded to include fill/finish and packaging capabilities.

“We believe that this step will become one of many on a journey to ensure sustainable access to transformative mRNA innovation on the African continent,” Stéphane Bancel, chief executive of Moderna, said at the time.

The drugmaker planned to invest $500 million (Sh62 billion) in the new factory, which was expected to produce up to 500 million doses of vaccines annually.

Moderna was following in the footsteps of BioNTech – the producer of Pfizer Covid-19 vaccines, which had signed deals with Rwanda and Senegal for the construction of its first factories to manufacture mRNA vaccines in Africa.

The mRNA vaccines use the genetic code for the spike protein of the coronavirus and are believed to cause a better immune response than conventional vaccines.

At that time, Chinese state-owned healthcare group Sinopharm also announced plans to set up a similar vaccine factory in Kenya.

In March 2022, Beijing said it had set aside more than Sh1 billion for the construction of the Sinopharm vaccine manufacturing facility in Nairobi.

The company’s managing director for East Africa Jimmy Wu said the establishment of the factory would help to address the vulnerability of Kenya to future health emergencies, as was evident during the Covid-19 pandemic.

However, the project has yet to take off.

On Thursday, Moderna was quoted by the Financial Times as confirming that it had “paused its efforts” to build a vaccine plant in Kenya.

“The demand in Africa for Covid-19 vaccines has declined since the pandemic and is insufficient to support the viability of the factory,” the FT quoted the drugmaker to have said.

However, there are reports that the company is yet to acquire a plot earmarked for it in a special economic zone at Tatu City in Kiambu County.

This is despite Kenya’s generous tax breaks and permission to more than halve its original planned investment from $500 million to $200 million, according to FT.

The newspaper further said Moderna’s plans have stalled over the purchase of a five- to 10-acre plot in Tatu City economic zone.

The cost to buy land in the industrial park is about Sh130 million per acre.