The era of carbon-subsidised clean cooking has hit a wall. Koko Networks, the climate tech darling that once promised to transition millions of African households from charcoal to bioethanol, has officially shut down its operations today.

Co-founded in 2014 by Greg Murray (CEO) and Sagun Saxena (CIO), along with Nick Stokes and Mel, the Nairobi-based company informed its 700 employees on Friday that they were being laid off immediately following two days of emergency board meetings. The company expressed “deep sadness” that its subsidies and family health improvements would no longer reach the Kenyan public, marking the end of a network that had invested over $300 million in regional infrastructure. The closure leaves approximately 1.5 million Kenyan households without a reliable fuel source and marks a catastrophic failure for one of the most heavily insured green investments in Africa.

A $60m legal fortress under pressure

While the collapse appears sudden, legal filings show that Koko’s lenders have been preparing for a worst-case scenario for over a year.

In December 2024, as the company navigated the early stages of its dispute with the Kenyan government, its primary lenders moved to tighten their grip on the company’s remaining assets. According to UK Companies House filings, Koko Networks Carbon Finance (UK) Limited registered two major security charges on December 23, 2024:

• A Borrower Security Agreement granting FirstRand Bank (RMB) a “qualifying floating charge” over all of the company’s assets, including intellectual property, bank accounts, and investments.
• A Cession in Security A Cession in Security specifically targeting the company’s Debt Service Reserve Account (DSRA) in Johannesburg. This agreement listed FirstRand Bank, the AfricaGoGreen Fund, and the Mirova Gigaton Fund as secured parties.

These instruments were designed to protect a $60 million facility agreement. However, with the company now in administration, these lenders are finding their security potentially worthless if the underlying business model — selling carbon credits — cannot be revived.

The Article 6 standoff

The terminal blow came from a regulatory deadlock with the Kenyan government. Koko’s business model relied on selling high-value carbon credits under Article 6 of the Paris Agreement to compliance markets, such as the aviation industry. These credits were used to subsidize the cost of stoves and bioethanol for low-income families.

The government’s refusal to issue a Letter of Authorisation (LOA) for these credits meant Koko could no longer bridge the gap between its low retail prices and high operating costs. Without the LOA, the “carbon-financed utility” model effectively became a house of cards.

The MIGA insurance: A final safety net?

The lenders’ last hope likely lies in a $179.6 million guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA), secured in March 2025.

This policy — the first of its kind for the carbon market — was specifically intended to protect Koko and its investors against “breach of contract” and political risk. If the lenders can prove that the Kenyan government’s withholding of the LOA constitutes a breach of the investment framework agreement signed in 2024, the MIGA insurance could trigger a payout.

However, “limbo” is the operative word. Payouts from political risk insurance can take years of arbitration to settle. In the meantime, the 3,000 automated fuel dispensers (KokoPoints) scattered across Kenya stand as silent monuments to a failed energy transition.

Why this matters for 2026 climate tech

The Koko collapse is a sobering moment for the “climate-as-a-service” sector. It highlights the extreme fragility of startups that rely on government-certified carbon revenue to sustain their bottom line.

For the Mirova Gigaton Fund, Microsoft Climate Innovation Fund, and Rand Merchant Bank, the focus now shifts from “expanding to 5 million customers” to a complex legal recovery process. For the broader ecosystem, the question is whether any clean cooking company can survive without a government that is fully aligned with the accounting complexities of the Paris Agreement.