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Casablanca — A planned $1 billion data center project backed by Microsoft and Abu Dhabi-based AI company G42 in Kenya has run into delays after talks with the Kenyan government stalled over payment guarantees, according to a Bloomberg report.
The project, announced in May 2024 during Kenyan President William Ruto’s state visit to Washington under the Biden administration, was supposed to become one of East Africa’s largest cloud infrastructure investments.
The facility was designed to run entirely on geothermal energy and provide regional access to Microsoft Azure cloud services through a new East African cloud region.
But negotiations became difficult after Microsoft and G42 reportedly asked Kenya to guarantee annual payments for a certain level of data center capacity, even if that capacity was not fully used. The government was unable to meet the requested guarantees, causing discussions to break down, Bloomberg reported, citing people familiar with the matter.
The companies are now considering scaling back the project, according to the report. Kenyan officials, however, say the talks are still alive.
John Tanui, principal secretary at Kenya’s Ministry of Information, told Bloomberg that the project “is not failed or withdrawn.” He said discussions are continuing, though the scale of the proposed facility still needs restructuring. Power requirements are also still being discussed.
Neither Microsoft, G42, nor Kenya’s Information Ministry immediately responded to Reuters requests for comment. Reuters also said it could not independently verify Bloomberg’s reporting.
The project had been seen as part of a broader push to expand cloud computing infrastructure across Africa, where demand for AI services and digital storage continues to rise. Kenya, which already markets itself as a regional tech hub, has increasingly positioned geothermal energy as a way to attract power-hungry data center investments.
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