Embattled climate startup, KOKO Networks put up for sale as PwC searches for investors

PricewaterhouseCoopers (PwC), a global accounting and consulting firm that handles bankruptcies and business restructuring, is seeking investors to acquire KOKO Networks or its assets after the Kenyan clean energy company collapsed under more than $60 million in debt.

PwC administrators George Weru and Muniu Thoithi launched a formal sale process, asking anyone interested in acquiring the business or its assets to submit proposals by February 26.

They’re offering either the entire company as a working business, or selling off pieces of it like the fuel distribution network, software, vehicles, and equipment.

KOKO built thousands of smart bioethanol dispensers across Kenya and Rwanda, serving over one million households with cleaner cooking fuel instead of charcoal. The company looked like it had figured out how to deliver affordable clean energy at scale, until its funding model fell apart.

The carbon credit problem KOKO had

KOKO’s entire business depended on selling carbon credits to international buyers. Here’s how it worked: when households switched from charcoal to bioethanol, that reduction in emissions generated carbon credits.

KOKO would sell those credits to companies or governments trying to offset their own pollution, then use that money to subsidize fuel costs for poor families.

Without the subsidy, bioethanol would cost too much for most Kenyan households. With it, the fuel became competitive with charcoal and even cheaper over time. But the whole system required one thing: government approval to sell credits internationally.

That approval never came. Kenya’s regulators dragged their feet on creating the framework KOKO needed to access carbon markets. Without carbon credit sales, KOKO couldn’t cover the difference between what customers paid and the fuel’s actual cost.

Read also: Kenyan climate startup Koko shuts down after $60m debt crisis

Cash ran out, lenders seized control of assets, and the company shut down earlier this month after laying off 700 employees.

What potential investors are being offered

PwC is offering potential buyers several options. They can acquire KOKO as a functioning business and try to restart operations, or they can purchase specific assets separately: the nationwide fuel distribution infrastructure, proprietary software and intellectual property, motor vehicles, and office equipment.

Before selling anything, the administrators must get approval from KOKO’s creditors: the banks, investors, and suppliers to whom the company owes money.

Kenyan insolvency law allows these creditors to vote on the proposed sale because the money from the sale will be used to repay them. The creditors can reject the deal if they believe they could get more money by selling to a different buyer or by selling off the assets individually.

Finding a buyer willing to inject the capital needed to stabilise operations won’t be easy. KOKO owes more than $60 million, and any investor would need to either solve the carbon credit problem that destroyed the original business model or figure out an entirely different way to make bioethanol distribution profitable.

For the million-plus households that relied on KOKO’s fuel network, the shutdown is immediate and practical. Many are already switching back to charcoal, which is dirtier, produces more smoke, and costs more over time.

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