In late January 2026, KOKO Networks, once hailed as a global model for climate-focused innovation, abruptly shut down its operations. The company’s collapse marks a significant setback for Kenya’s environmental goals and the fight against indoor air pollution. The fallout has seen 700 employees laid off, and more than 1.5 million households – approximately 11% of Kenya’s 13.9 million households, return to dirtier fuels.
KOKO Networks was founded in 2013 by Greg Murray with a mission to combat the environmental and health crises caused by charcoal and kerosene use. In many African countries, charcoal is a primary fuel source, contributing to massive deforestation which is estimated at 2 million hectares annually and causing millions of deaths due to indoor air pollution.
KOKO came in with a solution that was technology-driven distribution platform for bioethanol. By installing over 3,000 automated KOKO Points (fuel ATMs) in neighborhood shops, the company allowed families to buy small, affordable amounts of clean-burning fuel using reusable bottles. This eliminated the high upfront cost of large gas cylinders, making clean energy accessible to low-income urban households.
Carbon Credits, KOKO’s Achilles Heel
Its success relied on a unique subsidy structure which were funded by selling carbon credits. Because KOKO’s customers were switching away from charcoal, the company could measure the avoided carbon dioxide and methane emissions, package them as credits, and sell them to international companies in compliance markets. These credits, often certified by the Gold Standard, were particularly valuable to the airline industry, fetching prices as high as $20 per credit.
By 2024 and 2025, KOKO appeared to be a thriving enterprise. The company was operationally profitable and had raised more than US$100 million in debt and equity from major international investors.
In March 2025, the World Bank’s Multilateral Investment Guarantee Agency (MIGA) issued a guarantee worth US$179.6 million (KES 23.2 billion) to support KOKO’s expansion. This political risk insurance was designed to cover potential government breaches of contract or actions affecting carbon-credit sales. At that time, KOKO had ambitious plans to serve 3 million customers by late 2027.
The company’s sudden downfall was triggered by a dispute with the Kenyan government over a Letter of Authorization (LOA). Under Article 6 of the Paris Agreement, international carbon credit sales require host government approval to prevent double counting of emission reductions.
Despite a 2024 investment framework agreement, the Kenyan government reportedly refused to issue the necessary LOAs. Without this authorization, KOKO could not sell its credits in high-value international compliance markets, making its subsidized business model financially unsustainable.
On January 31, 2026, following emergency board meetings, KOKO filed for administration with PwC partners Muniu Thoiti and George Weru appointed as joint administrators of KOKO Networks limited and KOKO Global services on February 1, 2026. The administrators are calling for submission of any claim against the company in 14 days.
This collapse has left 1.5 million households at risk of returning to toxic fuels like charcoal and kerosene, as traditional liquefied petroleum gas (LPG) remains too expensive for the demography it served. The shutdown serves as an example of the risks facing green-tech startups when innovative business models collide with shifting government policy and regulatory uncertainty.
