Which Kobo device do you have? I haven't tried it but InkVT
https://github.com/llandsmeer/inkvt was the main option for this in the past, and I haven't seen one that is still maintained. Plato is a full alternative to the Kobo's default software Nickel that had a terminal emulator on the roadmap, but only went so far as to have an APL calculator app that isn't a true terminal emulator. There is a new community fork of Plato called Cadmus at
https://github.com/OGKevin/cadmus and we have working demos of a terminal emulator, possibly to be released pending an overhaul of external apps support. You can follow or join our Discord discussions on this via the chat banner linked on the GitHub page.