The guarantee will support the expansion of KOKO Networks which supplies bioethanol-based cookstoves and fuel to low-income households, helping to replace charcoal and wood with a cleaner alternative.
The Multilateral Investment Guarantee Agency (MIGA), member of the World Bank Group (WBG), has issued a $179.6m (€165m) guarantee to KOKO Networks which supplies clean-cooking solutions aimed at improving public health, protecting biodiversity and preventing the release of greenhouse gases (GHG).
The climate tech firm operates in Kenya and Rwanda, supplying bioethanol-based cookstoves and fuel to low-income households, helping to replace charcoal and wood with a cleaner alternative.
KOKO supplies over 1.3 million homes with sustainable bioethanol cooking fuel through a network of 3,000 fuel ATMs located inside corner shops across low-income neighbourhoods. The firm’s activities contribute to an estimated annual reduction of 6 million tonnes of CO2-equivalent emissions.
The firm’s model leverages carbon credits generated from household fuel-switching as a non-government energy subsidy. The guarantee will support KOKO’s expansion in Kenya, a move which also aims to strengthen carbon credit markets.
Speaking to Impact Investor, a MIGA spokesperson, said: “The project demonstrates the commercial viability of inclusive business models by leveraging innovative carbon-credit financing as a crucial enabler.”
“The proceeds of [KOKO’s] carbon credit sales are shared with local communities by supplying cookstoves and fuels below cost, making them affordable to low-income households,” they added.
Regulatory environment
The guarantee comes at a time when investors remain cautious about regulatory uncertainties in carbon markets, particularly those aligned with Article 6 of the Paris Agreement, which refers to how countries are able to transfer carbon credits earned from GHG reduction to help other countries meet their climate targets.
As such, MIGA’s breach of contract coverage protects KOKO’s carbon credits against the risk of host governments failing to uphold their legally binding commitments.
Additionally, the guarantee covers the risks of expropriation, war and civil disturbance, transfer restriction, and breach of contract for up to 15 years.
Greg Murray, KOKO’s CEO and co-founder said: “We operate in the highly regulated energy and compliance carbon sectors and are therefore exposed to significant political risk.
“MIGA’s guarantees have enabled risk-exposed energy infrastructure to be built in emerging markets for over 40 years, and we are proud to be the first MIGA policy covering the unique political risks associated with the Paris Agreement carbon markets.”
Just transition
KOKO’s project aligns with the World Bank Group’s (WBG) broader objectives, particularly its Country Partnership Framework for Kenya (2023-28), which prioritises climate resilience and adaptation.
In the last fiscal year, MIGA backed 26 projects across 16 African countries, amounting to $2.7bn in guarantees, 32% of its gross issuance. Many of these projects focus on clean energy, a sector that is expected to remain a priority as the WBG Guarantee Platform continues to scale its de-risking initiatives.
“The KOKO project maximises the impact of climate finance, aiming for measurable improvements in climate adaptation and resilience,” the MIGA spokesperson said.
“We are partnering with others to support building a pipeline of bankable projects, and we are innovating to find new ways to support the energy transition,” MIGA added.
