Koko collapse taints Ruto's green image

President William Ruto during the Annual Kaptagat Forest tree planting at Our Lady of Glory Kaptagat Girls High School in Elgeyo Marakwet county. [File, Standard]

Kenya’s reputation as a global green investment hub faces a severe test after clean cooking start-up Koko Networks filed for administration last week, citing a critical regulatory dispute with the government.  
 
The collapse leaves over 700 employees jobless and 1.3 million low-income households without access to bioethanol cooking fuel, directly challenging President William Ruto’s vigorous international promotion of Kenya as a leader in climate finance. 
 
The company was backed by the World Bank, Vitol, and Microsoft’s Climate Innovation Fund, among other venture firms.  
 
It stated that the Kenyan government’s failure to issue required letters of authorisation had blocked it from selling carbon credits—financial instruments representing reductions in greenhouse gas emissions—into regulated international markets, a core component of its business model. 
 
“It (Koko’s collapse) will discourage other innovators from bringing cleantech and greentech financing ideas to Kenyan markets,” Deepak Dave, an analyst at Nairobi-based Autonomi Capital told The Standard in interview.

“If the Government of Kenya was unhappy with the deal structure - or pricing - then they could have procured experts in these fields to advise them. Instead they got into a corner and at the last stage aborted the whole effort.” 
 
The crisis erupted after Kenya’s government did not provide final approvals following a June 2024 investment framework agreement according to Koko the energy firm. 
 
That agreement was designed to allow KOKO to sell credits under Article 6 of the UN Paris Agreement, a system for countries to trade emissions reductions to meet climate targets.

Without these authorisations, the company reckoned it could not finalise sales to compliance markets like the airline industry’s CORSIA scheme, where credits can fetch around $20 (Sh2,580) each. 
 
Koko had invested over $300 million (Sh38.7 billion) in building a network of more than 700 “Clean Fuel ATMs” in Nairobi shops, selling bioethanol fuel and cookstoves at subsidised prices. It planned to cover costs by selling carbon credits generated by users switching from polluting charcoal to cleaner bioethanol. The credits were verified by the Swiss-based certification body Gold Standard. 
 
Requests for comment from Kenya’s Ministry of Trade and Investment and Cabinet Secretary Lee Kinyanjui and other relevant officials such as the Energy and Petroleum Regulatory Authority and the National Environment Authority, which issue environmental and energy related certifications on the authorisation delay were not answered by press time.  
 
Analysts say the insolvency presents a stark contradiction for President Ruto’s administration. In December 2025, at the UN Environment Assembly in Nairobi, President Ruto called for “concrete and practical outcomes” in the green transition and announced Kenya would host an International Clean Cooking Summit. He has been a leading advocate for a $100 billion (Sh1.29 trillion) Africa-wide green industrialisation initiative. 
 
The incident adds to growing concerns among investors about Kenya’s business climate, marked by bureaucratic delays and policy shifts. It strikes directly at the narrative pushed by Ruto, who often highlights that over 90 per cent of Kenya’s grid power is from renewable sources like geothermal and wind to attract green investment. 
 
Key projects under his banner include the $800 million Kaishan Olkaria geothermal-powered fertiliser plant. At the UN, Ruto argued that the green transition “must be fair, accessible and affordable,” and that poorer nations cannot be asked to “protect the planet while their people sink deeper into hardship.” 
 
“This will be catastrophic for his reputation,” a person with knowledge of KOKO’s operations said, referencing Ruto’s “green president” and the latest dispute image. The source spoke on condition of anonymity due to the sensitivity of the matter. 
 
Dr David Ndii, who is the chief economic advisor for the president, did not make the government’s case better this week by admitting Kenya is not investor-friendly for green projects. 
 
“Koko’s case is uniquely multidimensional. The Paris Agreement itself, the veracity of cookstove carbon credits, our investor unfriendly Nationally Determined Contribution (NDC) regime and carbon market regulations, transparency of Koko’s business model, diplomatic meddling,” said Ndii. 
 
The fallout extends beyond Kenya’s borders. KOKO is considering a claim against the World Bank’s Multilateral Investment Guarantee Agency (Miga), according to people familiar with the matter. In March 2025, Miga provided a $179.6 million (Sh23.1 billion) political risk insurance policy to KOKO, the world’s first explicitly tied to carbon credit transactions, which covers government breach of contract. 
 
For Nairobi’s low-income residents, the impact is immediate and tangible.

“We are deeply saddened that the people of Kenya will no longer receive the energy subsidies, family health improvements and environmental benefits that KOKO has delivered,” the company said. The African Development Bank estimates that inhaling smoke from charcoal and firewood causes 600,000 premature deaths annually in Africa. 
 
KOKO’s network, which partnered with Vivo Energy Kenya for fuel distribution, will now be dismantled. The company informed its staff and 1.3 million customers of the wind-down over the weekend. 
 
Investors and analysts are now watching for the Kenyan government’s response. The lack of communication over the permit issue has raised questions about coordination and commitment within the administration to support complex, innovative financing models essential for climate-related projects.

According to regional financial consultant Alex Ponton the collapse of clean cooking startup KOKO Networks reflects a classic pitfall of market disruption in emerging economies. He argues the company’s heavily subsidised, carbon-credit-financed model directly threatened Kenya’s established liquefied petroleum gas (LPG) industry, a sector with significant political and economic influence.  
 
Ponton suggests that this dynamic likely created fatal regulatory resistance, underscoring the peril innovators face when challenging entrenched interests without sufficient leverage or political alignment. 
 
"‘Disrupt softly and carry a big stick.’ The Koko fallout in Kenya is a cautionary tale," wrote Alex Ponton on X. "Disruption is scary. What they forgot is that it meant the LPG industry was getting disrupted. LPG is a big business with multiple interests." 
 
The collapse also puts a spotlight on the viability of carbon credit revenues as a primary subsidy mechanism for essential consumer services in emerging markets, especially when governments are reluctant to provide direct fiscal support. 
 
Analysts said as the administrator begins the process of shutting down operations, the broader implications for Kenya’s investment landscape and its climate leadership ambitions remain uncertain. The government’s next steps—whether to address the regulatory failure, provide an explanation, or risk further erosion of investor confidence—will be closely monitored by both the financial and climate communities, they warned. 
 
Corporate records obtained by The Standard show KOKO Networks Limited was incorporated in Kenya in August 2015 with a nominal share capital of Sh262.5 million.   

Its business model involved selling carbon credits from clean cooking to compliance markets like the UN’s CORSIA scheme for airlines. 

The company's directors included Sagun Saxena Saxena, Gregory Christopher Murray, Nicholas Mark Philip Stokes, and U.S. national Matthew Brian Schiller, with John Kiumi Wambugu serving as company secretary.  

The shareholder structure is dominated by its Mauritius-based holding entity, KOKO Networks Limited, which holds the vast majority of preferential shares. This corporate framework underpinned the venture that is now entering administration after the pivotal dispute with the Kenyan government over regulatory authorisations. 

President Ruto has championed Kenya as a green industrialisation hub, seeking to expand its electricity grid from 3GW to 100GW by 2040 using renewables.