The collapse of Nairobi-based clean cooking startup Koko Networks has triggered significant financial losses for its UK parent company, underscoring the risks associated with carbon credit-dependent business models in emerging markets. The group’s failure to secure regulatory approval to export carbon credits in Kenya has resulted in a total financial hit of £36.85 million (Sh6.4 billion) and forced the parent entity into shutdown.
Filings submitted to UK authorities indicate that the parent firm, Koko Networks (UK) Limited, wrote off £35.5 million (Sh6.15 billion) in intercompany loans after concluding that the debt owed by its Kenyan subsidiary would not be recovered. The Kenyan entity had been central to the group’s operations, acting as the sole supplier of carbon credits that underpinned the parent company’s revenue model. Its collapse therefore disrupted the entire value chain, effectively rendering the UK business unsustainable.
In addition to loan impairments, the parent company recorded a further write-down of £1.32 million (Sh229 million) in intangible assets linked to its intellectual property portfolio. These assets included patents covering liquid fuel delivery and usage systems across multiple markets such as Kenya, India, Nigeria and South Africa. The impairment reflects reduced expectations of future economic benefits following the operational shutdown.
The Kenyan subsidiary entered administration on February 1, with advisory firm PricewaterhouseCoopers appointed to oversee the process. The move followed the government’s refusal to grant a letter of approval required for participation in international compliance carbon markets. Without access to these regulated markets, the company was unable to sustain its revenue model, which relied heavily on monetising carbon credits.
Financial performance data shows that the group reported a pre-tax loss of £14 million (Sh2.4 billion) in the year ended December 2024, an improvement from a £90 million (Sh15.6 billion) loss in the prior year. Revenues, however, grew to £44.7 million (Sh7.7 billion) in the year ended December 2025, up from £38.4 million (Sh6.6 billion) in 2024, indicating operational growth despite underlying structural challenges.
Koko Networks’ business model was built on subsidising clean cooking solutions for low-income households, with over 1.5 million users in Kenya at the time of its closure. Bioethanol stoves priced at Sh15,000 were sold for Sh1,500, while fuel retailing at Sh200 per litre was offered at Sh100, with losses offset through carbon credit sales. The viability of this model depended on access to higher-value compliance markets, where credits trade at approximately $20 (Sh2,590)—around ten times the price in voluntary markets.
The company had invested more than $300 million in Kenya, making it its largest operational base. It also secured political risk insurance of $179.6 million (Sh23.28 billion) from the Multilateral Investment Guarantee Agency, reflecting the scale and perceived strategic importance of its investment. However, regulatory concerns over transparency and the authenticity of carbon credits ultimately prevented access to compliance markets, despite a June 2024 agreement under Article 6 of the Paris Agreement framework.
The collapse highlights broader challenges in the carbon credit ecosystem, particularly around regulatory certainty, market access and verification standards. As countries tighten oversight of carbon markets, firms reliant on such revenue streams face increasing pressure to align with evolving compliance requirements.
Koko Networks’ exit from the market illustrates the fragility of business models tied to emerging financial instruments and the critical role of regulatory alignment in sustaining innovation-driven enterprises.
