'Should We Shut Down Half the Country': Kenya Halts Microsoft Mega Data Center

The project between Microsoft and G42 aimed at creating a large data center in Kenya is facing significant obstacles, especially on the energy front. According to reports from Bloomberg, the Kenyan government has not satisfied Microsoft's request for guarantees regarding annual payments for the energy capacity needed to power the infrastructure.

The initiative was announced in May 2024 during the visit of Kenyan President William Ruto to the United States. The plan included the construction of a campus powered by geothermal energy in the Olkaria region, in the Rift Valley, intended to host a new cloud region for Azure in East Africa. The project was to be led by G42, a company based in Abu Dhabi active in the AI and cloud infrastructure sector. The first phase had an initial capacity of 100 megawatts, with the goal of becoming operational within this year. However, in the long term, the ambition was to expand the site to 1 gigawatt.

The project's size has raised concrete doubts about the energy sustainability of the infrastructure. During a recent event in Nairobi, Ruto stated that maintaining the data center operational would require “shutting down half the country,” a phrase that effectively captures the problem. Kenya currently has an installed electrical capacity between 3,000 and 3,200 megawatts, while the national demand peak recently reached 2,444 MW. A 1 GW infrastructure would thus consume about a third of the country's total production capacity.

Even the initial phase of 100 MW would represent a significant load. The Olkaria geothermal complex, one of Kenya's main energy sources, currently generates around 950 MW across all its plants. A significant portion of this production would thus be allocated solely to the data center.

Despite the stalemate, the project has not been canceled. John Tanui, the Principal Secretary of the Kenyan Ministry of Information, explained that negotiations are ongoing and that the scope of the infrastructure still requires a phase of “structuring.” Concurrently, a second project of 60 MW developed with the local company EcoCloud is also under discussion, which is smaller in size and potentially more manageable from an energy perspective.

The Kenyan case is just the latest to highlight a problem that is emerging internationally: the availability of electricity has become one of the main bottlenecks for the expansion of data centers dedicated to artificial intelligence. Microsoft anticipates capital investments of around $190 billion in 2026 and, according to reported estimates, adds about 1 GW of data center capacity every three months globally. However, the accelerated growth of AI infrastructure increasingly collides with limitations related to electrical networks and energy availability. In the United States, almost half of the new data center projects planned for this year have been delayed or canceled due to a lack of adequate electrical infrastructure.