Former Kenya International Conference Centre (KICC) chair and Nairobi gubernatorial aspirant Irungu Nyakera has criticised the government’s role in the abrupt collapse of Koko Networks, warning that the fallout could dent Kenya’s reputation as a reliable investment destination.
In a statement posted on X, Nyakera said the shutdown of Koko — a clean‑energy firm that supplied ethanol fuel to more than 1.5 million households — showed how investors can “do everything right and still be undone by government failure.”
He noted Koko’s $300 million investment in infrastructure and over $100 million spent subsidising fuel, investments aimed at supporting affordable clean cooking in low‑income communities.
“Koko Networks invested over $300 million in clean cooking infrastructure, spent more than $100 million subsidising fuel for over 1.5 million households,” Nyakera said.
“Yet, despite all this, the company was crippled by the government’s refusal to authorise the sale of carbon credits in the global market.”
The firm’s business model depended heavily on carbon credit revenues from international markets to offset operating costs.
However, regulatory requirements tied to the Letter of Authorisation (LOA) under new carbon‑trading rules prevented Koko from monetising these credits, cutting off its key revenue stream and prompting its collapse on January 31, 2026.
Nyakera highlighted that despite Koko’s efforts to mitigate regulatory risk — including securing a $179.6 million political risk guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) — the firm was still unable to operate sustainably under the current policy environment.
“The result is that Kenyan taxpayers are now exposed to a potential KES 23 billion bill,” he added, referring to potential claims under the guarantee if the dispute with government authorities triggers compensation mechanisms.
Nyakera warned the debacle will “stain Kenya internationally” and create uncertainty for existing and prospective investors, many of whom are “quietly questioning whether government commitments made today will still hold tomorrow.”
The collapse has already led to job losses for hundreds of direct employees and will likely push some households back to charcoal and kerosene fuels, undermining public health and environmental objectives tied to clean‑energy adoption.