Kenya Pauses $1B Microsoft-G42 Data Center Project, Citing Insufficient Power Capacity

President William Ruto announced in May 2024 during a state visit to Washington that Kenya would build a $1 billion geothermal energy-powered data center. The project, orchestrated by the former Biden administration, was to be developed by Microsoft and G42 roughly 60 miles northwest of Nairobi.

It was designed to deliver government and business cloud services on Microsoft’s Azure platform while running entirely on geothermal power, which makes up around 40% of Kenya’s energy mix.

Semafor reported in September 2025 that the Microsoft-G42 data center project had stalled, with no ground broken months after the initial announcement. Ruto told grassroots leaders in Nairobi last week that the facility would demand a third of the country’s total installed capacity of around 3,000 megawatts. “To switch on that one data center, we would need to shut off power for half the country.

That’s when I knew there was a problem,” he said. The Kenyan leader argued that the country must raise its energy capacity to 10,000MW by 2030. He cited the data center as a prime example to justify plans to raise $38 billion for energy infrastructure and other major projects through the sale of government assets and by crowding in private capital.

Kenyan government officials speaking on condition of anonymity said that last year the technology ministry drafted a project concept note for the data center. The note was presented to the National Treasury to unlock funding. The National Treasury did not give its approvals, effectively derailing the initiative.

During a meeting in August 2025 between Kenyan government officials and Microsoft executives, it became clear the data center would not be online by its original target of May 2026. G42 declined to comment. Microsoft did not immediately respond to a request for comment.

Kenya’s data center market is projected to triple to $805 million by 2031, according to a new report cited by Semafor. The country accounts for more than three-quarters of fresh data center capacity expected in East African markets by 2030, according to a report by the African Union.

Nxtra, a subsidiary of Airtel Africa, launched construction in September 2025 of East Africa’s largest data center in Kenya’s Tatu City.

The 44MW facility is slated for completion in 2026. Microsoft announced plans in April 2026 to invest $329 million in the expansion of its cloud services in South Africa.