NAIROBI — Plans to build a major Microsoft data center in East Africa have been delayed after disagreements emerged between the company and the Kenyan government over financial guarantees tied to the project.
According to a Bloomberg report published Sunday, the dispute centers on payment commitments requested by Microsoft as part of the proposed investment.
The project, announced in 2024, was part of a partnership between Microsoft and Abu Dhabi-based AI company G42, with both firms planning to invest around $1 billion into a large-scale data center in Kenya.
At the time, the initiative was presented as a major step toward expanding cloud computing services across East Africa and strengthening the region’s digital infrastructure.
The announcement came during Kenyan President William Ruto’s state visit to Washington under former U.S. President Joe Biden’s administration.
The facility was expected to run entirely on geothermal energy and provide regional access to Microsoft’s Azure cloud platform — a key strategic service for governments, businesses, and technology startups across Africa.
But negotiations reportedly stalled after Microsoft and G42 asked the Kenyan government to guarantee payments for a fixed level of annual data center capacity.
According to Bloomberg, Kenyan officials were unable to provide guarantees matching the level requested by Microsoft, causing talks to break down.
The report added that Microsoft could ultimately decide to reduce the scale of the project instead of abandoning it entirely.
Kenyan Information Ministry official John Tanui said discussions are still ongoing and insisted the project has not been canceled.
“Kenya is continuing with the talks. The project has not been withdrawn,” Tanui said in an interview.
He added that the size of the planned facility still needs adjustment and noted that discussions over energy requirements remain unresolved.
The delay highlights the growing challenges facing large technology infrastructure projects in emerging markets, where governments are eager for investment but often struggle with the financial guarantees demanded by global tech firms.
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