Microsoft and Kenyan Government Discuss Payment Assurances for Proposed East Africa Data Center

Microsoft and the Kenyan government have not reached agreement on the terms of payment assurances for a proposed data center in Kenya, according to people familiar with the matter. The project, intended as Microsoft’s first data center in East Africa, has not advanced to construction while the parties discuss the scope and form of those assurances.

The discussions center on the level of payment guarantees the Kenyan government is willing to provide for the multi-year project. Microsoft has sought assurances to address financial risks associated with the facility, which would support Azure cloud services for enterprises, startups, public sector organizations and consumers across the region.

No timeline has been provided for when an agreement might be reached.

The Kenya site was selected after Microsoft announced plans several years ago to establish a data center presence in East Africa as part of its global cloud expansion. The country was chosen because of its improving power infrastructure and position as a regional gateway. Without local data centers, much of the region’s cloud traffic currently routes through facilities in Europe or South Africa.

Kenya has positioned itself as a technology hub for East Africa and has previously highlighted data centers as important for improving connectivity and supporting economic growth. Government officials have not issued public statements on the specific terms under discussion. Microsoft has also not commented publicly on the status of the project.

People familiar with the talks said both parties continue to seek a resolution. The proposed facility forms part of Microsoft’s broader push to expand cloud computing capacity across Africa. Data center projects require substantial upfront capital and long-term revenue certainty.