Microsoft-G42 Kenya data centre stalls over government offtake demands

"Microsoft asked Nairobi for a guarantee that Kenyan public bodies would buy a defined amount of computing capacity each year. The government did not commit at the level Microsoft requested. Talks broke down. The project was announced in May 2024 and structured as a flagship of Microsoft's East Africa expansion: a geothermal-powered facility supplying Azure to government, enterprise, and developer customers across the region, with G42 as a strategic co-investor."

"The $1bn budget was split between Microsoft and G42, with the Kenyan government providing land, power-purchase terms, and regulatory facilitation. Geothermal power, available cheaply and abundantly in Kenya, was central to the pitch. Microsoft has not formally cancelled the project. The Kenyan Ministry of Information told local press that the project remains live: "It is not failed or withdrawn.""

"Bloomberg's sources frame the situation as a delay, not a death; the companies may rescope the facility to a smaller footprint that does not require the same offtake guarantee. What is clear is that the original commercial structure does not currently work. The offtake demand is the unusual element. Hyperscalers do not typically ask host governments to guarantee compute purchases; the same offtake question Western utilities are answering , where utiliti"

A $1bn Microsoft data-centre project in Kenya, built as a partnership with UAE-based G42, has stalled after commercial talks with the Kenyan government failed. Microsoft sought a guaranteed annual offtake, asking public bodies to buy a defined amount of computing capacity each year. The government did not commit at the requested level, causing talks to break down. The project, announced in May 2024, is geothermal-powered and intended to supply Azure to government, enterprise, and developer customers across the region. Kenya would provide land, power-purchase terms, and regulatory facilitation. The project has not been formally cancelled, and it may be rescaled to avoid the same offtake guarantee requirement.

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