KOKO Networks, a leading clean-cooking startup in Kenya, has announced plans to end its operations in Kenya.
On Friday, KOKO Customers were informed of the plans to wind up via a message stating:
“Samahani, KOKO customer, we regret to inform you KOKO is closing operations today. We will share next steps soon. Asante for being a part of this journey.”
Thousands of homesteads in Kenya use KOKO in cooking. Kenyans refill the cans for as low as Ksh 100.
Why KOKO is Shutting Down its Operation in Kenya
The main reason behind KOKO’s closure is the failure by the Kenyan government to authorize the sale of carbon credits, which are essential for subsidizing fuel costs for low-income households.
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These credits are generated when households switch from charcoal and wood to bioethanol, reducing greenhouse gas emissions, preventing deforestation, and improving indoor air quality.
KOKO Networks had secured a $179.6 million political risk guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA), covering expropriation, war and civil disturbance, transfer restrictions, and breach of contract for up to 15 years.
The project supports the distribution of bioethanol cookstoves and fuel to low-income households, contributing to public health, environmental protection, and climate resilience goals aligned with the Paris Agreement.
Reports indicate the company may file a claim under the MIGA guarantee, alleging breach of contract, with 700 jobs and a $300 million investment at stake.
About KOKO Networks
KOKO is an international technology company that provides clean ethanol cooking fuel and cooking products.
KOKO Networks operates a residential energy service that supplies bioethanol-based cookstoves and fuel to low-income households.
The company’s innovative model allowed users to switch from polluting fuels such as charcoal and wood, thereby improving compliance.
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The initiative also aligned with Kenya’s environmental and public health objectives, including reducing greenhouse gas emissions, combating deforestation, and improving the quality of air in households.
Impact on Employees and Customers
The shutdown has immediate consequences for both employees and customers in Kenya. Approximately 700 employees stare at job losses, while thousands of households that relied on KOKO’s ethanol fuel face uncertainty.
The closure also disrupts KOKO’s network of automated fuel refill stations and local agents, affecting small businesses and communities that relied on its operations.
Homesteads that relied on KOKO will have to switch to alternative cooking methods, such as charcoal and other traditional methods.
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