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

Koko Networks, a Kenyan climate tech startup once touted as a major solution to clean cooking in Africa, has shut down operations after accumulating more than $60 million in debt. The company confirmed the closure to staff on Friday, laying off about 700 employees with immediate effect.

Founded in 2014, Koko established a fuel distribution network that enabled low-income households to transition from charcoal to bioethanol, a cleaner and more sustainable alternative. Over the years, it rolled out thousands of automated fuel dispensers across Kenya and served more than one million households.

But the business collapsed after regulatory delays cut off its main source of funding, carbon credits, leaving the company unable to cover operating costs or repay lenders.

When carbon money stopped flowing

Koko made money by selling carbon credits from households using cleaner fuel. That money helped lower stove and fuel prices. But the government never approved international credit trading, so the system failed.

Approval was never granted. As delays continued, Koko faced increasing difficulty covering the gap between customer payments and supply chain costs. With cash flow diminishing, lenders secured their loans and tightened control over company assets well before the shutdown.

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Koko’s collapse is significant because it was one of Africa’s most recognised clean cooking startups, having raised substantial funding and received support from global climate funds. Its failure raises concerns about the viability of climate startups that rely heavily on government-supported carbon markets.

It also highlights the practical fragility of carbon financing. Despite growing demand for cleaner energy, regulatory uncertainty can still derail large-scale projects intended to benefit low-income communities.

What Koko’s shutdown leaves behind

Koko’s collapse is significant because it was one of Africa’s most recognised clean cooking startups, having raised substantial funding and received support from global climate funds. Its failure raises concerns about the viability of climate startups that rely heavily on government-supported carbon markets.

For households, the immediate impact is practical: over one million Kenyan families now face uncertainty around access to affordable cooking fuel, with many likely forced back to charcoal, which is dirtier and more expensive over time.

For investors and lenders, the focus has shifted to recovering losses. Koko owes more than $60 million, and although its backers hold insurance guarantees, any payout could take years due to legal and regulatory processes.

The shutdown in Kenya serves as a warning to African climate tech founders that even well-funded solutions can fail without aligned government policy, financing, and infrastructure.

Koko’s rise and fall now stand as one of the clearest examples of how hard it remains to turn climate innovation into sustainable business, especially when entire models depend on carbon markets that are still evolving.

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