Microsoft and G42’s planned data center in Kenya faces electricity-supply concerns and a dispute over government payment guarantees. Kenya’s principal secretary for ICT, John Tanui, said in comments published on May 12, 2026, that negotiations were continuing.
People familiar with the matter said Microsoft and G42 had asked the Kenyan government to pay for a certain amount of computing capacity annually. They said talks broke down when Kenya could not provide guarantees at the level Microsoft requested. The people asked not to be identified because the negotiations were private.
Tanui gave a different account. “The talks have not collapsed; they are still ongoing, and we are very confident,” he said. He said the government could not provide some guarantees because procurement and investment decisions depended on market forces. Commitments involving a facility serving East Africa also required decisions across different jurisdictions, he said.
Power requirements and project scale
President William Ruto has warned about the project’s electricity requirements. “To switch on that one data center, we would need to shut off power for half the country,” he said.
Kenya’s special technology envoy, Philip Thigo, said Ruto’s remarks highlighted the need to expand electricity generation rather than signalling a suspension of the project. Thigo said the government remained committed to the initiative and to increasing generating capacity to at least 10,000 megawatts by 2030.
G42’s announcement of its collaboration with Kenyan developer EcoCloud described an initial 100-megawatt facility with potential to expand to 1 gigawatt. Microsoft’s May 2024 announcement did not specify the electrical capacity of its proposed Olkaria campus.
Kenya’s State Department for Energy reported installed generating capacity of 3,272 megawatts and peak demand of 2,443 megawatts for February 2026. For comparison, 1 gigawatt is equivalent to about 31% of that installed capacity. Those national figures do not establish how much electricity would be available to the proposed facility.
The original investment plan
Microsoft and Abu Dhabi-based G42 announced the initiative on May 22, 2024, during Ruto’s state visit to Washington. The proposed data center in Kenya was one component of a broader digital investment package for which G42 would lead the arrangement of an initial $1 billion.
Microsoft said G42 and local partners would design and build the Olkaria campus to run entirely on renewable geothermal energy and host Azure services through a new East Africa cloud region. The announced timetable was conditional: the region would become operational within 24 months of signing definitive agreements.
The package also included plans for local-language AI research, an East Africa Innovation Lab, digital skills training and connectivity investments.
