Microsoft’s African Data Center Falters on Payment Demands

A Microsoft data center project in East Africa has been delayed due to disagreements with the Kenyan government over the company’s request for guaranteed payments, Bloomberg News reported, as cited by Reuters.

Microsoft-backed data center project in Kenya has reportedly stalled amid disagreements over government payment guarantees. (Photo: Tyler Lahti, Wikimedia Commons)

In May 2024, Microsoft partnered with G42 to invest $1 billion in a data center in Kenya as part of efforts to expand cloud-computing services in East Africa.

The project was announced during Kenyan President William Ruto’s state visit to Washington under the Biden administration.

The facility was expected to run entirely on geothermal power and provide access to Microsoft’s Azure cloud region for East Africa.

Microsoft and G42 reportedly asked the Kenyan government to commit to paying for a certain amount of capacity annually, but negotiations stalled when the government could not provide guarantees at the level requested by Microsoft.

Bloomberg added that the companies may ultimately scale back the project.

Kenya is continuing discussions, however, and “it is not failed or withdrawn,” Bloomberg quoted John Tanui, principal secretary at Kenya’s Ministry of Information, as saying in an interview.