KOKO Networks has built technology to transform the market for urban cooking fuel – with major environmental and social benefits. KOKO Fuel has successfully launched at scale across Nairobi, with major expansion plans throughout Kenya and beyond.
Nairobi. A city pulsing with life. The Kenyan capital is a major city with international flair and over four million inhabitants. Streets are bustling, and many roads choked with traffic. A young man gets out of a bus and strolls across a busy marketplace. “Forget the shopping centres”, he says to the camera; “this is where money really moves”. He adds: “Digital is our new language, and mobile our new currency.” The scene is taken from an advertising film by KOKO Networks, an international tech company that was founded in Nairobi and is focused on delivering solutions that improve life in the world’s fastest-growing cities.
Under this overarching mission, KOKO’s first solution – KOKO Fuel – centres on innovations that reimagine the supply chain for a basic need: safe, affordable cooking fuel. Through a Network of over 600 Fuel ATMs, known as “KOKO Points”, which are installed inside local convenience shops, customers can buy clean bioethanol fuel in small quantities close to home, with major positive impact on family health and the environment.
KOKO retails a modern, high-power Cooker, which comes with a reusable bottle that is linked to a customer through their mobile phone number. The KOKO Cooker retails for around 40 US dollars, and customers can use their KOKO account to save towards the total amount over time (with no interest charged). All transactions are made using mobile money systems that are ubiquitous in Kenya, and once customers have completed their payment, they collect their stove from any KOKO Agent in their neighbourhood.
The fuel itself is significantly cheaper than deforestation-based charcoal or kerosene, which the majority of Nairobi households have traditionally been forced to cook with. A large part of the fuel affordability stems from the removal of expensive single-use plastic bottles.
Following a small pilot, KOKO fully launched its Network of ATMs across Nairobi towards the end of last year, and has since acquired more than 60,000 customers across the city; the company is already preparing to take its solution country-wide.
Tanker routes managed via data cloud
This is Africa's largest deployment of IoT technology for consumer fuels, with cloud-based tracking of Fuel inventory across the supply chain: each "KOKO Point" is connected to the "KOKO Cloud" software platform, sending real-time updates – via a range of internal sensors – to a Network Operations Centre. At the same time, KOKO’s fuel distribution partner Vivo Energy Kenya sources molasses-based bioethanol fuel from local and regional suppliers, and delivers it to selected service stations it operates across Nairobi. These service stations have dedicated underground storage tanks for holding cooking fuel, with KOKO’s customized IoT hardware controlling the movement and tracking of fuel, first onto small fuel delivery trucks, and then during the last-mile distribution to the Fuel ATMs.
KfW subsidiary DEG – Deutsche Investitions- und Entwicklungsgesellschaft was an early supporter of the scheme, providing an interest-free loan of 500,000 euros under its Up-Scaling programme. As Dr. Tobias Bidlingmaier, Up-Scaling Team Leader at DEG, explains: “In this way, we help young companies to take their innovative business models to the next level”. He has no doubt that this model has a great future: “It creates jobs and offers shop owners a further source of income, while KOKO’s innovations and mission can be expanded to a range of other products and services that deliver value to urban consumers, retailers and suppliers.”
„Replacing charcoal is an important measure to preserve forests and endangered species.“
The advantages of bioethanol stoves
However, it is not only the business model that convinces Bidlingmaier; he is also struck by KOKO Fuel’s potential to deliver major positive social and environmental impacts: “Bioethanol is a clean cooking fuel that moves people away from deforestation-based charcoal and kerosene, both of which kill hundreds of thousands of people each year in Africa through indoor air pollution.” Indeed, diseases caused by the toxic fumes of dirty cooking fuels kill more each year than HIV, malaria and tuberculosis combined. So, while providing a huge improvement in convenience, affordability and cleanliness, bioethanol cooking saves lives.
On the environmental front, tackling the dominance of charcoal across Africa is a huge challenge. Charcoal consumption drives two million hectares of deforestation annually, and has wiped out one third of Africa’s forests in 30 years. The rate of environmental devastation only increases with urbanization, as people shift from using sustainably collected firewood rurally to deforestation-based charcoal in urban areas. Charcoal production leads to biodiversity loss, soil erosion, microclimate change, and ultimately lower agricultural productivity and food insecurity. As Bidlingmaier points out: „Replacing charcoal with any form of bioethanol – especially that produced in East Africa from molasses (a by-product of the sugar industry) – is therefore an important measure to preserve forests and endangered species.“ Solutions like KOKO have a crucial role to play in many emerging market cities of the future, as the world tries to ensure Healthy living conditions and Sustainable Energy for All under the UN goals.
The described project contributes to the following United Nationsʼ Sustainable Development Goals
Goal 3: Ensure healthy lives and promote well-being for all at all ages
Health is the goal, prerequisite and result of sustainable development. Supporting health is a humanitarian requirement – both in developed and developing countries. Around 39 per cent of the worldʼs population lives without health insurance. In poor countries, this amount even exceeds 90 per cent. Many people still die from diseases that are not necessarily fatal with the right treatment, or that could easily be prevented with vaccinations. Strengthening health systems, particularly by making vaccines widely available, can make it possible for us to drive these diseases back and even eradicate them by 2030.
All United Nations member states adopted the 2030 Agenda in 2015. At its heart is a list of 17 goals for sustainable development, known as the Sustainable Development Goals (SDGs). Our world should become a place where people are able to live in peace with each other in ways that are ecologically compatible, socially just, and economically effective.
Published on KfW Stories: 7 June 2018, last updated: 30 November 2020.