Koko Networks Closure Sparks Debate on Policy, Carbon Markets and Clean-Energy Investments

Kenya, February 02,2026 - The abrupt closure of clean-cooking start-up Koko Networks in Kenya has ignited debate among policymakers, investors and energy advocates about the intersection of climate finance, regulation and business viability, with President William Ruto’s economic advisor David Ndii invoking a blunt metaphor to describe the outcome.

Koko, a venture-backed technology company that provided clean ethanol fuel and products to urban and peri-urban households, ceased operations on January 31, 2026, leaving customers, employees and small-scale distributors scrambling for alternatives. 

The shutdown followed a protracted dispute with the Kenyan government over regulatory approval for carbon credit sales that underpinned the company’s core business model.

In response to concerns about the immediate impact on households and jobs, Ndii, a prominent economist advising the president, acknowledged the multifaceted causes of the collapse, noting that “Koko’s case is uniquely multidimensional” and pointing to issues including the Paris Agreement framework, carbon market regulations and government policy on carbon credit authorisations. “Too late. Even good doctors lose patients,” he added in response to questions about whether the state could have intervened to prevent the shutdown.

Koko’s business model combined clean energy delivery for low-income users with carbon finance, earning certified reductions by helping households switch from charcoal and kerosene to ethanol fuel, then selling the resulting carbon credits to overseas compliance markets. 

These sales were integral to subsidising ethanol prices and make the product affordable. Without the expected revenue from carbon credits, the company could no longer sustain its subsidised pricing structure or cover operating costs.

Sources report that the government’s failure to issue the required Letter of Authorisation (LOA) allowing Koko to sell carbon credits internationally ultimately undermined the company’s revenue model. 

This authorization, tied to trading under Article 6 of the Paris Agreement, was seen as essential for accessing higher-value compliance carbon markets rather than the less lucrative voluntary market.

Koko’s abrupt exit has impacted more than 700 direct employees, including engineers, logistics workers and customer support staff, and raised uncertainty for about 1.5 million Kenyan households that relied on its ethanol fuel for daily cooking. 

Thousands of local agents who hosted the company’s automated fuel dispensers have also lost a source of income.