KOKO Networks Shuts down: 650 employees laid-off and 1.5 Million direct customers affected

Kenya's clean energy sector faces a profound crisis following the sudden operational shutdown of Koko Networks, a company that provided affordable cooking fuel to an estimated 1.5 million low-income households. The closure, announced internally on January 30, 2026, has immediate and severe repercussions for customers, employees, and the nation's environmental goals. The decision stems from the company's failed effort to obtain a critical Letter of Authorisation from the Kenyan government, which blocked its ability to sell carbon credits on the international market. This revenue stream was the fundamental pillar of Koko's business model, allowing it to sell biofuel and specialized cookstoves at a heavily subsidized rate. With this funding mechanism severed, the company found its operations financially unsustainable.

Koko's model was designed to make clean cooking accessible. It sold fuel at 100 Kenyan shillings per litre, half the estimated market price, and its cookers at 1,500 shillings, a mere tenth of the commercial value. The difference was financed by the sale of carbon credits, earned by displacing dirtier fuels like charcoal and kerosene. The government's rejection of the application to export these credits effectively removed this subsidy, collapsing the economic structure that served its vast customer base. The immediate impact is a massive disruption. Hundreds of thousands of families now must seek alternatives in a market where refilling a standard 6kg cooking gas cylinder costs approximately 1,350 shillings, a daunting expense for many. This price shock threatens to reverse years of progress, pushing a significant portion of the population back to polluting, health-hazardous fuels and increasing Kenya's carbon emissions.

The human and economic toll extends far beyond the kitchen. At least 650 direct employees have been laid off, and thousands of agents, many of whom are women entrepreneurs who operated over 3,000 "KokoPoint" refueling machines across the country, have lost their livelihoods overnight. The closure also sends a destabilizing signal to the investment and startup community. Just a year prior, Koko had secured a $179.64 million guarantee from the World Bank's Multilateral Investment Guarantee Agency to support an ambitious expansion plan targeting 3 million new customers by 2027. Key international investors, including Japan's Mizuho Bank and South Africa's Rand Merchant Bank, are now facing significant setbacks. This event raises critical questions about the regulatory environment for climate-focused innovation in Kenya, suggesting a potential misalignment between government policy and the financial models required for large-scale, socially impactful ventures.

Moving forward, the situation demands a coordinated response. In the short term, there is an urgent need for government and development partners to explore stopgap measures to protect the most vulnerable households from a forced return to toxic fuels. In the longer term, this crisis underscores the necessity for a clear, transparent, and supportive regulatory framework for the carbon market in Kenya. If the country aims to be a leader in green growth and attract investment for a sustainable transition, it must create pathways for companies to convert environmental impact into financial viability. The collapse of Koko Networks is a stark lesson in the interconnectedness of policy, finance, and social welfare, highlighting the fragility of systems that rely too heavily on a single point of failure. The path to recovery requires building a more resilient and diversified ecosystem for clean energy access