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Kenyan clean-cooking startup, Koko Networks, on Friday announced the immediate closure of its operations and the layoff of its entire 700-person workforce following government’s rejection of a critical letter of authorisation (LOA) that underpins the company’s carbon credit sales.
The decision comes after two days of intensive deliberations by the company’s board and executives at its Nairobi offices.
A board member and an employee, who spoke on condition of anonymity, told TechCabal that the shutdown was unavoidable, as carbon credit revenue was essential to Koko’s subsidised business model.
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“It’s been two days of intense deliberations on the matter. We were facing bankruptcy because selling carbon credits is key to our business model,” said the board member.
Koko Networks sells biofuels and stoves at subsidised prices to low-income households.
The startup’s model relies on revenue from carbon credit sales abroad to fund these subsidies, offering a litre of bioethanol at KES 100 ($0.77), compared with a market price of KES 200 ($1.54).
Its stoves are sold at KES 1,500 ($11.53), against a market price of KES 15,000 ($115.3). With the LOA rejection, Koko can no longer sustain this pricing model.
The closure risks pushing 1.5 million households back to dirtier fuels such as charcoal and kerosene.
The company also employed over 700 direct staff and relied on thousands of agents operating more than 3,000 automated refuelling machines.
Founded in 2013 by Greg Murray to combat deforestation and promote clean energy, Koko had raised over US$100 million in debt and equity from investors including Verod-Kepple, Rand Merchant Bank, Mirova, and Microsoft Climate Innovation Fund.
Less than a year ago, the company secured a US$179.64 million guarantee from the World Bank through its political risk insurance arm, MIGA, intended to support expansion and protect against risks including civil unrest, land expropriation, and contractual breaches.
The company had aimed to expand its customer base by at least three million households by December 2027, advancing Kenya’s government objectives to increase adoption of clean cooking fuels.
However, the current shutdown marks a significant setback for both Koko and national clean-energy initiatives.
Koko Networks did not immediately respond to requests for comment.
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