Story perspectives

Microsoft, G42 Push Back $1B Geothermal Data Center Over Funding

5/11/2026

Summary

Microsoft Delays Data-Center

Microsoft and Abu Dhabi-based G42 delayed their $1 billion geothermal-powered Kenyan data centre after the government could not guarantee payments.
The 2024 deal called for about 100 megawatts, with a long-term aim of up to 1 gigawatt.
Principal secretary John Tanui said talks continue and the project remains alive.
President William Ruto warned the needed energy could force “switching off half the country.”
Negotiations now focus on a 60-megawatt centre with EcoCloud.

Summary

Microsoft Cloud Stalled

Microsoft and UAE AI firm G42 plan East Africa’s first dedicated Azure cloud region in Kenya to create a digital hub.
Bloomberg says the project is stalled due to a dispute that reflects emerging-market tensions over risk-sharing and payment models.
Negotiators are revising the deal, possibly cutting power capacity, and consider the delay a test case for financing large-scale cloud infrastructure in fiscally limited economies.

History

Historical Context

Cape Town’s tech sector expanded at 8.5 % annually by 2025, part of a global surge that lifted data-centre electricity consumption to 415 TWh (1.5 % of total) in 2024. Microsoft’s planned Azure region in East Africa is now stalled, reflecting earlier delays in African digital-infrastructure projects, and underscoring persistent hurdles in extending cloud capacity across the continent.

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Microsoft Delays Data-Center

Microsoft and Abu Dhabi-based G42 delayed their $1 billion geothermal-powered Kenyan data centre after the government could not guarantee payments.
The 2024 deal called for about 100 megawatts, with a long-term aim of up to 1 gigawatt.
Principal secretary John Tanui said talks continue and the project remains alive.
President William Ruto warned the needed energy could force “switching off half the country.”
Negotiations now focus on a 60-megawatt centre with EcoCloud.

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