Kenya Pauses $1 Billion Microsoft Data Centre Over Power Constraints

Kenya has put on hold plans for a $1 billion Microsoft–G42 data centre after it became clear the country’s power supply cannot carry a project of that size. President William Ruto said the facility would have taken up too much of the national grid, pointing to a deeper issue that continues to shape how far digital infrastructure can realistically expand across the continent. The project was first announced during Ruto’s state visit to Washington in May 2024 and was expected to be built about 100 kilometres northwest of Nairobi. It was designed to run largely on geothermal energy and had been framed as a flagship investment to expand cloud services through Microsoft’s Azure platform for businesses and government institutions.

Power Supply Constraints

Concerns about the project’s size emerged during planning. Kenya’s installed electricity capacity stands at roughly 3,000 megawatts, and the proposed data centre alone would have required close to a third of that. Speaking in Nairobi, Ruto acknowledged that the demand was simply too large under current conditions, noting that powering a single facility of that size would have forced difficult trade-offs across the grid. Kenya has long leaned on its renewable energy profile, particularly geothermal power, which makes up around 40% of its energy mix. That has helped attract energy-intensive projects in recent years. But officials now accept that while the power is relatively clean, there just isn’t enough of it yet especially for large-scale facilities that run continuously and draw heavily from the grid.

Government Review and Delays

Behind the scenes, a concept note prepared by the technology ministry was submitted to the National Treasury for approval but did not move forward. By August 2025, discussions between Kenyan officials and Microsoft had already pointed to delays, with the project expected to miss its original May 2026 completion timeline. Neither Microsoft nor G42 has issued immediate comment on the latest developments.

Beyond this specific case, the delay suggests a broader pattern across African markets. Big investment announcements, especially those made during diplomatic visits, don’t always line up with what is technically or financially workable on the ground. Demand for data storage and computing power is rising quickly, but the systems needed to support it especially reliable electricity are still catching up.

Kenya’s government is now putting more weight behind expanding power supply, with a target of reaching 10,000 megawatts by 2030. The plan involves raising about $38 billion through a mix of public funding, asset sales, and private sector participation. The stalled data centre has added urgency to that push. Even with this setback, activity in the sector hasn’t stopped. Airtel Africa’s data centre arm, Nxtra, is developing a 44MW facility in Tatu City, expected to become the largest in East Africa once completed. Microsoft is also continuing to grow its presence elsewhere on the continent, including a $329 million investment in South Africa focused on strengthening cloud infrastructure, with particular attention to power and water requirements.There is clear interest and capital, but infrastructure especially electricity remains the bottleneck for Kenya.