'We should turn off half the country': Kenya halts Microsoft megadatacenter plans

The project that Microsoft and G42 aimed to build a large datacenter in Kenya is facing significant obstacles, especially on the energy front. According to reports from Bloomberg, the Kenyan government did not fulfill Microsoft's request for guarantees regarding the annual payments for the energy capacity needed to power the infrastructure.

The initiative was announced in May 2024 during Kenyan President William Ruto's visit to the United States. The plan included the construction of a campus powered by geothermal energy in the Olkaria region of the Rift Valley, intended to host a new Azure cloud region for 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 called for an initial capacity of 100 megawatts, with the goal of becoming operational by this year. However, in the long term, the ambition was to expand the site to 1 gigawatt.

The project's scale has raised serious doubts about the energy sustainability of the infrastructure. During a recent event in Nairobi, Ruto stated that to keep the datacenter operational, it would be necessary to "turn off half the country," a phrase that effectively captures the problem.

Kenya has an installed electricity capacity of between 3,000 and 3,200 megawatts, while national peak demand recently reached 2,444 MW. Therefore, a 1 GW infrastructure would absorb about one-third of the country’s entire production capacity. Even the initial phase of 100 MW would represent a significant load. The Olkaria geothermal complex, one of Kenya's major energy sources, currently generates about 950 MW across all its plants. A significant portion of the production would thus be allocated solely to the datacenter.

Despite the stalemate, the project has not been canceled. John Tanui, Principal Secretary of the Kenyan Ministry of Information, explained that talks are ongoing and that the scope of the infrastructure still requires a phase of "structuring."

Simultaneously, there is also a discussion about a second 60 MW project developed together with the local company EcoCloud, which is smaller in scale 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 datacenters dedicated to artificial intelligence.

Microsoft anticipates capital expenditures of about $190 billion in 2026 and, according to reports, adds approximately 1 GW of datacenter capacity globally every three months. However, the accelerated growth of AI infrastructure is increasingly colliding with limits related to electrical networks and energy availability. In the United States, nearly half of the new datacenter projects planned for this year have been delayed or canceled due to a lack of adequate electrical infrastructure.