Microsoft stalls Kenya datacenter project

Microsoft and G42’s planned $1 billion data center in Kenya has stalled after talks with the Kenyan government broke down over payment guarantees, according to Bloomberg, which cited people familiar with the matter. The project was announced on May 22, 2024 as part of a broader digital investment package tied to Kenyan President William Ruto’s state visit to Washington. Microsoft said at the time that G42 would lead the arrangement of the initial $1 billion investment and build a green data center in Olkaria to run Azure in a new East Africa cloud region. As of mid-May 2026, that facility has not moved ahead on the original timetable, and the East Africa cloud region is not operating. ### What exactly stalled in Kenya? Bloomberg reported on May 10 that a large Microsoft data center site in East Africa had been delayed by disagreements with the Kenyan government over guaranteed payments, citing people familiar with the matter. Those people said Microsoft and Abu Dhabi-based G42 had asked Kenya to commit to paying for a certain amount of computing capacity each year, and talks broke down when the government could not provide guarantees at the level requested. Microsoft’s own May 22, 2024 announcement identified the Kenya project as a “state-of-the-art green data center” to be built by G42 and its partners in Olkaria. The company said the site would run Microsoft Azure in a new East Africa cloud region. ### What had Microsoft and G42 originally promised? (bloomberg.com) Microsoft said in 2024 that G42 would lead an initial $1 billion investment package covering the data center and other digital infrastructure in Kenya. The company also said the East Africa cloud region would become operational within 24 months of the signing of definitive agreements. (news.microsoft.com) The May 2024 announcement tied the project to Kenya’s push to become a regional technology hub. Microsoft said the Olkaria campus would run entirely on renewable geothermal energy and use water-conservation technology. ### Why did the government guarantees matter so much? (news.microsoft.com) Bloomberg’s account points to the contract structure rather than construction alone. The report said Microsoft and G42 sought an annual commitment from the Kenyan government to buy a fixed amount of cloud-computing capacity, effectively giving the project a guaranteed revenue base before full buildout. (news.microsoft.com) That detail matters because the Kenya plan was not pitched as a standard commercial real-estate build. Microsoft’s 2024 statement described the cloud region as infrastructure for customers across Kenya and East Africa, while Bloomberg’s later report indicates the companies also wanted state-backed demand assurances. (bloomberg.com) ### Was power also part of the problem? President William Ruto said in Nairobi in late April or early May, as reported by Data Center Dynamics, that the scale of the proposed project would put major pressure on Kenya’s grid. Data Center Dynamics reported that Ruto said, “To switch on that one data center, we would need to shut off power for half the country,” describing a project that he said could require far more electricity than the system could readily supply. (news.microsoft.com) Data Center Dynamics reported that Kenya’s current power supply is about 3 gigawatts and that Ruto is targeting 10 gigawatts by 2030. The same report said officials had concluded by August 2025 that the original May 2026 launch date would not be met. ### What does this say about Microsoft’s Africa buildout? (datacenterdynamics.com) Microsoft’s Kenya plan was supposed to anchor a new East Africa Azure region, but the project now appears to be in limbo while discussions continue. Data Center Dynamics, citing Bloomberg’s later reporting, said the project remained under discussion and could be scaled back. (datacenterdynamics.com) The Kenya delay comes as large data center projects globally are colliding with two practical constraints: electricity supply and long-term customer commitments. In Kenya’s case, the named participants are clear — Microsoft, G42 and the Kenyan government — and the unresolved issues are also clear: guaranteed annual capacity payments and the amount of power the site would require. (datacenterdynamics.com) Microsoft said on May 22, 2024 that the East Africa cloud region would open within 24 months of definitive agreements, making that original timetable a reference point for what comes next. Bloomberg reported on May 10, 2026 that talks had broken down but discussions were still active, leaving Microsoft, G42 and Kenyan officials to decide whether to restructure or reduce the project. (news.microsoft.com) (bloomberg.com)