Microsoft and G42 seek annual capacity payments from Kenya, stalling a $1 billion East Africa cloud project announced in May 2024.
Microsoft and UAE-based G42 have paused their $1 billion Kenya data center project after failing to secure government guarantees for annual capacity payments. The facility, announced in May 2024 during Kenyan President William Ruto’s U.S. visit, aimed to deliver Azure cloud services across East Africa using geothermal power.
Negotiations broke down when Kenya declined to meet the payment demands, though officials insist the project remains under discussion. Plans initially targeted a 2024 launch, but Bloomberg reports the companies may scale back the initiative amid ongoing talks over power requirements and financial terms.
The standoff highlights challenges in expanding cloud infrastructure in emerging markets, where governments balance investment incentives with fiscal constraints. Microsoft’s Azure growth strategy in Africa now faces delays as competitors advance regional data center projects.