Circle Gas, the UK-based parent company of Kenyan clean-cooking business M-Gas, reported $67 million in contracted carbon credits awaiting delivery and $57 million in cash prepayments in 2025, according to its financial statements.
The figures highlight the role carbon-credit revenue plays in financing clean-cooking businesses in Kenya. They also point to the risks these companies face when government approval determines whether expected revenue can be realised.
Circle Gas’s accounts, filed in September, show that the company lost $39.3 million in 2025. It ended the year with $1.1 million in cash and reported net liabilities of $156.7 million. The company also needs about $28 million in additional funding to support its growth plans.
Carbon credits are an important part of the business model for clean-cooking companies such as M-Gas. The company supplies liquefied petroleum gas (LPG) in small, affordable quantities through smart meters, allowing households to pay as they cook rather than buying large amounts of fuel upfront.
The model is designed to make cleaner cooking more accessible to households that may struggle to afford the cost of a full gas cylinder at once. Revenue from carbon credits generated by emissions reductions can help support the cost of providing this service.
But the model also depends on whether those credits can be approved and sold.
That risk became clear in February 2026, when Koko Networks, another Kenyan clean-cooking company, entered administration after the government declined to authorise the carbon-credit sales on which its business relied.
Circle Gas is now navigating its own approval process.
According to its annual report, the company received a “Letter of Acceptance” confirming that its carbon-credit projects met the required eligibility criteria and could proceed to apply for a “Letter of Authorisation”.
In January 2026, M-Gas announced that its clean-cooking carbon project had received a Letter of Approval.
However, Circle Gas’s annual report does not make clear whether the Letter of Approval announced by M-Gas is the same document referred to as a Letter of Acceptance.
That distinction matters because eligibility to proceed through an approval process does not necessarily mean a company has secured every authorisation needed to sell its carbon credits.
For Circle Gas, the challenge is to turn its contracted carbon credits into revenue while securing the funding needed to sustain its operations and expansion.
Koko’s collapse has shown how exposed clean-cooking businesses can be when their financial plans depend heavily on carbon markets and government decisions. Circle Gas’s financial position and approval process offer another indication of the challenges facing the sector in Kenya.
The company’s ability to secure the necessary approvals, deliver its contracted credits and raise additional funding will be important to its next phase of growth.
Kenya’s carbon-market rules distinguish between approval for a project and authorisation to transfer carbon credits internationally. The final authorisation requires government approval and determines whether specific emissions reductions can be transferred to buyers abroad.
Circle Gas did not respond to a request for comment.
The value of carbon credits
Circle Gas reported $67 million in contracted carbon credits awaiting delivery at the end of 2025. It also reported $57 million in cash prepayments received under carbon-credit contracts.
The two figures represent different things: the $67 million relates to credits the company has yet to deliver, while the $57 million is money buyers have already paid in advance.
However, the accounts do not specify how much of the contracted credits depends on outstanding authorisation or how much of the advance payments remains available to the company.
Circle Gas says credits that receive the necessary authorisation can command higher prices than those sold in advance. The company has not disclosed the size of the expected price difference.
It also leaves this potential additional revenue out of its financial projections, meaning its current funding plans do not rely on the higher prices.
Despite the potential value of its carbon-credit portfolio, Circle Gas remained loss-making in 2025. Revenue rose to $40.8 million from $36.1 million in 2024, but the company recorded a $39.3 million loss after tax.
Its cash reserves fell to $1.1 million by the end of the year, while net liabilities increased to $156.7 million from $116.5 million a year earlier.
The figures underline the financial pressure facing the company as it works to deliver its contracted credits, secure the necessary authorisations and raise additional funding.
Circle Gas says it needs about $28 million to finance its growth plans for 2026. Without the additional funding, the company expects to limit investment and remain largely stagnant.
“ At the date of approval of these financial statements, the additional third-party funding of approximately US$28.0m necessary to finance continued growth funding for the base case in 2026 is yet to be fully secured, and there is no certainty that funding will be available to the Group (Circle Gas),” the company said in its accounts.
The company’s losses and funding needs cannot be attributed solely to the outstanding carbon-credit authorisation. However, the delay leaves the prospect of higher revenue from carbon credits uncertain as Circle Gas seeks additional capital.
Koko’s collapse offers a warning
Koko Networks built its business around subsidised bioethanol stoves and fuel for low-income households in Kenya. The company relied on carbon-credit sales to help cover its operating costs and keep its products affordable.
When the Kenyan government declined to authorise its carbon-credit sales, Koko lost access to a revenue stream that was central to its business model.
The company shut down in January 2026, laying off more than 700 employees. Its Kenyan and UK entities entered administration in February, leaving administrators to recover money owed to creditors.
Carbon credits held by Koko’s UK entity are among the assets being considered in the recovery process. Without a buyer for the credits, FirstRand Bank is owed $60 million, while other unsecured creditors are owed about $171 million.
Koko’s collapse illustrates the financial risks of building a business around carbon-credit revenue that cannot be realised when expected.
In early February 2026, the government rejected Koko’s application. Trade Cabinet Secretary Lee Kinyanjui said the volume of credits the company sought to transfer could have exhausted Kenya’s allocation for international transfers. That, he said, would have left less room for projects in sectors such as agriculture and manufacturing to sell their credits abroad.
Circle Gas’s position is different. Its authorisation request has not been reported as rejected, and M-Gas announced that its clean-cooking carbon project had received a Letter of Approval.
However, Circle Gas’s accounts indicate that the company is still seeking a Letter of Authorisation. They do not specify how much of its contracted carbon-credit portfolio depends on that final approval.
The distinction matters. Carbon credits may be recorded as assets, contracted to buyers and used to support financing plans, but their expected value depends on the company being able to deliver and sell them under the applicable rules.
Kenya’s carbon-market framework gives the government a role in determining which emissions reductions can be transferred internationally. As a result, regulatory decisions can affect companies’ expected revenue, access to financing and ability to meet their financial obligations.
For Circle Gas, the challenge is to secure the necessary authorisation, deliver its contracted credits and raise the additional funding it needs to grow. Koko’s experience shows what can happen when expected carbon-credit revenue fails to materialise, but Circle Gas’s eventual outcome will depend on its own financial position and the progress of its approval process.