The sudden shutdown of KOKO Networks sent shockwaves across Kenya, catching employees and customers completely off guard. Hundreds of staff members were left reeling after the company abruptly halted operations, with many learning of the decision without warning.
The move plunged livelihoods into uncertainty and brought to an abrupt end one of Kenya’s most ambitious clean-cooking ventures.
The impact extended far beyond KOKO’s workforce. Hundreds of thousands of customers woke up to find a service they relied on suddenly unavailable.
For many households and small businesses, the closure meant an immediate disruption to a basic daily need cooking fuel.
Sources estimate that up to 1.5 million households across Kenya depended on KOKO’s ethanol fuel as a cheaper and cleaner alternative to charcoal and kerosene.
Founded in 2013, KOKO Networks was not a fragile startup. It had grown into one of Kenya’s most visible clean-energy companies, operating more than 3,000 automated ethanol dispensing machines across urban and peri-urban areas.
A Clean Energy Dream Built on Carbon Credits
Over its lifetime, the company raised more than Sh12 Billion in debt and equity from major international investors, including Verod-Kepple, Rand Merchant Bank, Mirova, and the Microsoft Climate Innovation Fund, with backing also linked to World Bank-aligned institutions.
That level of funding reflected strong global confidence in clean cooking as both a development and climate solution, as well as faith in carbon markets as a mechanism to bridge affordability gaps in emerging economies.
KOKO positioned itself at the intersection of these trends, promoting a model designed to tackle deforestation, indoor air pollution, and energy poverty simultaneously.
At the core of KOKO’s operations was a business model built around carbon credits certificates issued for verified reductions in greenhouse gas emissions.
By encouraging households to switch from charcoal or kerosene to bioethanol, KOKO reduced emissions and earned carbon credits for every tonne avoided. These credits were then sold on international markets to companies seeking to offset their emissions.
Revenue from carbon credit sales was used to heavily subsidise fuel and cookstoves for low-income households. Ethanol refills were priced from as little as Sh30, making them significantly cheaper than charcoal in many urban areas.
Beyond affordability, ethanol reduced indoor air pollution a major cause of respiratory illness, particularly among women and children while also easing pressure on forests by cutting demand for charcoal.
Cookstoves sold for about Sh1,500, far below the market price of roughly Sh13,000.This pricing strategy enabled rapid expansion, embedding ethanol fuel into the daily lives of millions of Kenyans.
Regulatory Deadlock Triggers Sudden Collapse
However, the entire model hinged on a single regulatory requirement, a Letter of Authorisation from the Kenyan government allowing KOKO to sell all carbon credits generated by its operations on international markets.
Without the approval, the company could not monetise the emissions reductions that financed its subsidies.
Sources say the government’s refusal to issue the authorisation became a single point of failure. Without access to carbon credit revenues, KOKO could no longer sustain subsidised pricing.
