NAIROBI, Kenya- A major Microsoft-backed data centre project in East Africa has been delayed after disagreements with the Kenyan government over financial guarantees requested by the company, according to a Bloomberg report.
Bloomberg News reported that the project, a joint investment between Microsoft and UAE-based artificial intelligence firm G42, has faced setbacks due to negotiations over a request for guaranteed annual payments tied to capacity commitments.
The $1 billion project, first announced in 2024 during President William Ruto’s visit to the United States, was designed to expand cloud computing infrastructure in Kenya and establish a major Azure cloud region for East Africa.
According to Bloomberg, the discussions stalled after the Kenyan government was unable to commit to the level of financial guarantees sought by Microsoft and its partner G42.
The facility was expected to run on geothermal energy and serve as a key digital infrastructure hub for the region, boosting Kenya’s position in global cloud and artificial intelligence services.
Despite the delay, officials familiar with the talks said the project has not been cancelled, and discussions are ongoing on restructuring the deal, including power capacity and financing arrangements.
The report highlights growing tensions in large-scale digital infrastructure investments in emerging markets, where governments and global tech firms are increasingly negotiating complex risk-sharing and payment models.
