President William Ruto’s economic adviser David Ndii attributed the closure of Koko Networks’ operations in Kenya to a complex mix of economic, regulatory, and policy-related factors, as the once-dominant clean cooking technology firm exits the market following a dispute with the government over carbon credits.
Koko Networks, a venture-backed company that operated in Kenya and other parts of East Africa, provided clean ethanol cooking fuel and modern cooking products to Kenyan households.
At its peak, the Nairobi-based firm had helped transition more than 1.3 million households from traditional charcoal to bio-ethanol fuel, positioning itself as a key player in Kenya’s clean energy and climate action agenda.
However, the company shut down its Kenyan operations last week after a standoff with the government over the sale of carbon credits-an issue that lay at the core of its business model.
Koko sold ethanol fuel at prices significantly below market rates to make clean cooking affordable for low-income families.
To sustain this subsidy, the company relied heavily on revenue generated from carbon credits, which represent verified reductions in greenhouse gas emissions.
Responding to public concern over the closure, Ndii argued that the company’s collapse could not be blamed on a single issue. “Koko’s case is uniquely multidimensional,” Ndii said.
“The Paris Agreement itself, the veracity of cookstove carbon credits, our investor unfriendly NDC regime and carbon market regulations, transparency of Koko’s business model, diplomatic meddling.”
Industry observers note that the crisis escalated when the Kenyan government effectively blocked the sale of Koko’s carbon credits. Without the ability to monetize its environmental impact, the company’s main subsidy mechanism collapsed.
Once carbon credit revenue was cut off, Koko could no longer balance fuel sales against high operational and logistics costs, triggering an immediate liquidity crisis.
The shutdown was swift. Koko had built an extensive nationwide network of automated “Koko Points” — fuel ATMs located in neighbourhood shops – supported by a large supply chain and logistics system.
Analysts say the regulatory standoff created uncertainty that deterred further investment, leaving the firm unable to sustain operations.
Ndii was also asked whether the government could intervene, given that Koko provided clean cooking solutions for thousands of households and created jobs. His response was blunt: “Too late. Even good doctors lose patients.”
Further complicating the matter,other reports also indicates that Koko had reached an agreement with the World Bank’s Multilateral Investment Guarantee Agency (MIGA), under which the Kenyan state could be compelled to compensate investors if government interference with the business is established.
Koko’s exit leaves a significant gap in Kenya’s clean energy landscape. Beyond job losses, millions of households previously served by the company may revert to traditional fuels, potentially reversing gains in reducing indoor air pollution and deforestation.
The collapse underscores the vulnerability of climate-focused business models operating at the intersection of carbon finance and shifting government regulation.
