The collapse of KOKO Networks. A cookstoves project in Kenya that relied on compliance carbon trading
When the Kenyan government refused to issue a letter of authorisation KOKO collapsed.
The collapse of KOKO Networks in Kenya is a warning to companies relying on carbon trading for financing. KOKO made up losses from selling cookstoves and fuel at heavily reduced prices from sales of carbon credits. KOKO sold bioethanol at about half the usual price in Kenya. KOKO sold its cookstoves for about 10% of the market rate.
The company invested US$300 million, employed 700 people in Kenya, and expanded its network of cookstoves to 1.5 million households.
But last week, KOKO collapsed after the Kenyan government refused to issue a letter of authorisation to sell carbon credits under Article 6 of the Paris Agreement and the aviation industry’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The company is now filing for insolvency.
While KOKO started operations in Kenya in 2013, KOKO Networks (UK) Limited was incorporated in the UK in April 2019. The directors are Micael Da Costa, Greg Murray, Sagun Saxena, and Nicholas Stokes.
Another company, KOKO Networks Carbon Finance (UK) Limited was incorporated in the UK in September 2024. The directors are Greg Murray and Nicholas Stokes.
Accounts for 2024 are overdue for both companies. Failure to file accounts is a criminal offence under UK Companies Law.
KOKO sold bioethanol made from sugarcane from thousands of vending machines in small shops around the country. Customers filled reusable KOKO fuel bottles from the vending machines. They then connected the bottles to their KOKO cookstoves at home.
KOKO’s micro-tankers took the bioethanol from tanks in Vivo Energy petrol stations to the vending machines. Vivo Energy is a British petrol station company that operates in Africa. Since July 2022, Vivo Energy has been owned by the Dutch multinational energy and commodity trading company, Vitol Group.
Other investors in KOKO include the Microsoft Climate Innovation Fund, Mirova, Germany’s KfW, and Rand Merchant Bank.
Cookstoves and carbon trading
KOKO’s cookstoves programme is addressing a serious problem. Cooking with charcoal and kerosene is polluting — both in terms of air-quality in homes and in terms of greenhouse gas emissions. But KOKO’s financing model relied completely on carbon trading.
Vitol’s 2022 Environmental, Social and Governance Report explains that,
Deforestation-based charcoal and wood are the dominant forms of cooking energy in Kenya, and dirty cooking fuel causes more than 400 Kenyan deaths per week from indoor air pollution, the majority of which are children under 5-years old.
KOKO’s carbon credits were generated through calculations about how much deforestation are avoided by the switch from cooking with charcoal to bioethanol. The credits were certified under the Gold Standard’s verification system. Almost 15 million carbon credits have been issued from KOKO’s cookstoves programme in Kenya. Almost 170,000 of these have been retired.
But the price of carbon credits on the voluntary market was not high enough for KOKO’s business model.
The dispute with the Kenyan government goes back several years. In 2023, the government refused KOKO’s application to import bioethanol. KOKO was forced to use Kenyan bioethanol, which was more expensive.
Then, in 2024, the Climate Change (Carbon Markets) Regulations required a letter of authority for international sales of carbon credits and a 25% revenue share for the government. The final straw was the government’s refusal to issue the letter of authorisation.
The World Bank
In March 2025, the World Bank’s Multilateral Investment Guarantee Agency (MIGA) insured KOKO’s investment for US$179.6 million. The guarantee covers investments by KOKO Networks Limited of Mauritius into KOKO Networks Limited of Kenya. According to MIGA’s website, “The guarantee covers the risks of expropriation, war and civil disturbance, transfer restriction, and breach of contract for up to 15 years.”
KOKO’s CEO, Greg Murray, told Fastmarkets that, “MIGA’s guarantee ensures that our carbon finance model remains viable, allowing us to continue expanding clean fuel access while generating compliance-grade carbon credits.”
That turned out not to be true. KOKO will now file a claim with MIGA alleging breach of contract by the Kenyan government, according to the Financial Times.
The collapse
The first that many of KOKO’s customers and employees knew about the company’s collapse was when they received a text message on the morning of 30 January 2026:
On 30 January 2026, the Financial Times reported that KOKO was “on the brink of bankruptcy after a dispute with the Kenyan government over the sale of carbon credits”. KOKO told the Financial Times that “selling carbon credits to the compliance markets is essential, in the absence of government subsidies, to transition from charcoal cooking”.
The Financial Times reports that,
In June 2024, Kenya’s government signed an investment framework agreement with Koko that would allow it to sell credits into compliance markets under Article 6 of the UN Paris Agreement.
However, Kenya’s government has not issued the necessary letters of authorisation needed to complete the sale of credits.
The Kenyan government response
There is little information publicly available about exactly why the Kenyan government did not issue the letter of authorisation.
David Ndii is economic advisor to Kenya’s President William Ruto. Yesterday, Ndii commented on Twitter about KOKO. He wrote that,
Koko’s case is uniquely multidimensional. 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 . . .
When Nicky Kamau asked him about the money invested and the jobs lost as a result of the collapse of KOKO, Ndii replied, “Too late. Even good doctors lose patients.”
As a result of KOKO’s collapse, 1.5 million households are left without cleaner fuel. 700 people have lost their jobs. KOKO’s business model relied on carbon trading which fell through. As a result 1.5 million households will have to go back to burning charcoal and kerosene to cook their food, with all the health and climate implications of that move.
It remains to be seen what Gold Standard will do with the 15 million carbon credits issued to KOKO’s now defunct cookstoves programme.
Carbon projects can only receive subsidy (carbon offsets) if they prove that the project would not take place without it (additionality). In other words, this vulnerability to policy shocks and price fluctuations is a feature, not a bug.