• Kenya blocks Koko’s carbon credit sales, forcing shutdown, 700 layoffs and cutting off 1.5m households from clean bioethanol fuel.
• Model relied on selling 6m carbon credits a year; without state authorisation, its $300m Kenya investment unravelled.
• The government cited market-monopoly risks and carbon accounting concerns; the $179.6m World Bank guarantee is now at stake.

Koko Networks, once one of Africa’s largest clean cooking companies, shut down its Kenyan operations on January 31, 2026, laying off all 700 employees after the Kenyan government declined to grant the regulatory approval required for the international sale of its carbon credits—the financial backbone of its business model.

The company filed for insolvency on February 1. PricewaterhouseCoopers (PwC), through administrators Muniu Thoithi and George Weru, assumed control of Koko Networks Limited and its Kenyan subsidiary, in accordance with Kenya’s Insolvency Act of 2015. The closure leaves an estimated 1.5 million low-income households without access to Koko’s bioethanol fuel, which had served as a cleaner alternative to charcoal and kerosene.

A Business Model Built on Carbon Finance

Founded in 2013 by Australian entrepreneur Greg Murray, Koko developed a network of more than 3,000 bioethanol dispensing machines installed in neighborhood shops across Kenya’s urban and peri-urban areas. The system operated like a “smart fuel station” network, allowing customers to refill reusable canisters using a mobile app or card.

Koko’s pricing was highly subsidized. Its double-burner stoves were sold at 1,500 Kenyan shillings (about $11.50), compared with a market price of 15,000 shillings—a 90% discount. Bioethanol retailed at 100 shillings per liter, roughly half the prevailing market price. These subsidies were entirely financed through revenue from the sale of carbon credits on international markets.

According to a March 2025 press release from the World Bank’s Multilateral Investment Guarantee Agency (MIGA), Koko’s operations generated approximately 6 million carbon credits annually, certified by Gold Standard under a United Nations methodology. Since launch, nearly 15 million credits had been issued, according to ratings agency Sylvera.

Koko invested roughly $300 million in Kenya, half of which went toward building its production and distribution infrastructure, according to Business Daily Africa. The company raised more than $100 million in equity and debt from investors including the Microsoft Climate Innovation Fund, Mirova, Rand Merchant Bank, and Verod-Kepple.

To sell its credits into compliance markets—particularly under CORSIA (the international aviation offset scheme) and Article 6 of the Paris Agreement—Koko required a Letter of Authorization (LoA) from the Kenyan government. Such a letter triggers a “corresponding adjustment” to the national emissions inventory, ensuring emissions reductions are not double-counted.

In June 2024, the government signed an investment framework agreement with Koko, seen at the time as paving the way for compliance market transactions. However, new carbon market regulations introduced in mid-2024 required projects to secure an LoA from the National Environment Management Authority (NEMA). These rules also imposed significant fiscal obligations: 25% of revenues payable to the state, a $4 per-credit levy, and 50% of fees allocated to a national climate fund.

Government Pushback

Trade Cabinet Secretary Lee Kinyanjui publicly explained the government’s position in comments reported by Business Daily Africa recently. “The business model did not align,” Kinyanjui said. “If Kenya had approved the volumes they requested, no other company would have been able to benefit. They would have absorbed the entirety of Kenya’s allocation.”

He indicated that the scale of credits claimed by Koko would have effectively monopolized Kenya’s share of international compliance markets, sidelining sectors such as agriculture, manufacturing, and forestry. Government officials also questioned the integrity of Koko’s carbon accounting.

David Ndii, economic adviser to President William Ruto, described the matter as “multidimensional,” citing concerns over the validity of cookstove carbon credits, Kenya’s NDC framework, carbon market regulations, business model transparency, and diplomatic pressures.

An investigation by REDD-Monitor, drawing on analysis by cookstove project specialist Tom Price, alleged that Koko used a 93% non-renewable biomass (fNRB) rate, while the actual rate in urban centers such as Nairobi may now be closer to 38%. If accurate, this discrepancy would imply over-crediting by more than 2.4. Ratings agency BeZero assigned Koko an overall “B” rating—indicating a low likelihood of achieving one tonne of avoided CO₂—and the lowest possible “D” score for carbon accounting integrity.

In March 2025, MIGA granted Koko a $179.6 million political risk insurance guarantee—the first such coverage globally tied specifically to carbon credits. The guarantee protected against risks including expropriation, civil unrest, transfer restrictions, and breach of contract, for up to 15 years.

MIGA’s mandate explicitly covered the risk that host governments might fail to honor legally binding commitments, including the provision of corresponding adjustments under Article 6 of the Paris Agreement. Koko’s investors are now expected to file claims under this guarantee. Should MIGA pay out, it would likely seek recovery from Kenya’s Treasury—raising potential fiscal and reputational implications for the country as a destination for climate investment.

Idriss Linge