Mirova, the sustainable investment arm of Natixis Investment Managers, has announced a significant financing package for KOKO Networks, a Nairobi-based climate technology company pioneering a clean cooking fuel solution across Kenya and Rwanda. The investment, channelled through Mirova’s Gigaton Fund, will enable KOKO to significantly scale its innovative bioethanol-based residential energy utility, directly addressing the widespread reliance on harmful charcoal and firewood in the region.
Founded in 2014, KOKO Networks has developed a unique model to distribute bioethanol as a cooking fuel through a dense network of high-tech “Fuel ATMs” located within local corner stores. Since its public launch in Nairobi in 2019, and subsequent expansion into Rwanda, KOKO has reached over 1.3 million households, offering a cleaner and more sustainable alternative to traditional cooking methods.
The scale of the challenge KOKO is tackling is immense. In sub-Saharan Africa, over 850 million people depend on wood and charcoal for their daily cooking needs. Projections indicate that this number will still be as high as 2.2 billion globally by 2030, primarily concentrated in Asia and sub-Saharan Africa. This reliance on inefficient and polluting fuels has severe consequences, contributing to climate change through deforestation and greenhouse gas emissions. Critically, it also causes an estimated 3.7 million premature deaths annually due to indoor air pollution, disproportionately affecting women and children.
Mirova’s investment comes in the form of a carbon finance debt facility. This innovative structure leverages the carbon emission reductions achieved by KOKO’s bioethanol fuel to generate revenue, a portion of which is then passed on to households as a non-governmental energy subsidy. This mechanism is crucial in making clean cooking accessible even to the poorest communities, who are often locked into using cheaper but more harmful charcoal.
John Kimotho, Investment Director at Mirova Kenya Ltd, stated: “We are proud to support KOKO’s transformative bioethanol cooking fuel technology platform, which aligns perfectly with the Mirova Gigaton Fund’s focus on innovative solutions to tackle climate challenges in emerging countries. This investment aims to not only reduce emissions from cooking but also combat deforestation by decreasing dependence on charcoal. Through this partnership, we are advancing scalable, sustainable solutions for a greener future.”
Greg Murray, CEO and Co-Founder of KOKO, welcomed the investment, saying: “Solving the charcoal curse is one of the grand challenges of development, and leveraging compliance carbon markets to enable a non-government consumer energy subsidy is an idea whose time has finally arrived. We look forward to working together with the Mirova team for the long term.”
KOKO’s model involves customers purchasing smart canisters which they can then refill with bioethanol at the network of Fuel ATMs. This system provides a convenient and affordable way for households to access clean cooking fuel, effectively replacing the demand for charcoal. The company also launched a retail platform in 2021 aimed at small shops to distribute other products, further leveraging its established network.
Mirova’s investment aligns with several United Nations Sustainable Development Goals (SDGs), including ensuring access to affordable and clean energy (SDG 7), combating climate change (SDG 13), protecting forests (SDG 15), improving health and well-being (SDG 3), and building sustainable infrastructure (SDGs 8, 9, and 11).
The move by Mirova highlights the growing interest from impact investors in backing climate-focused technology companies in Africa. While significant progress has been made in expanding access to electricity across the continent, clean cooking solutions have often been overlooked. KOKO’s innovative approach, combining technology, a robust distribution network, and a carbon finance mechanism, presents a compelling model for addressing this critical gap.
The success of KOKO ’s expansion, supported by Mirova ’s funding, could have significant implications for the broader clean cooking sector in Africa and beyond. By demonstrating a commercially viable and scalable solution, KOKO is not only improving the lives of millions of people but also contributing to global efforts to mitigate climate change and achieve sustainable development. The partnership between a major sustainable investment firm like Mirova and an innovative climate tech company like KOKO signals a positive step towards a cleaner and healthier future for East Africa.