State denies suspension of Ksh.129B Microsoft data centre project

Kenya’s Special Technology Envoy, Amb Philip Thigo, has formally dismissed reports suggesting the government suspended the Ksh129 billion data centre project partnered with Microsoft and G42. The clarification follows international media reports that interpreted recent statements by President William Ruto as a signal that the deal had stalled.

Amb Thigo stated that the project remains a flagship initiative and that any concerns raised were related to the scale of energy infrastructure required, rather than a decision to halt works. The envoy emphasized that the project is central to the national ambition of becoming a regional hub for cloud services.

The Microsoft-G42 partnership, which was originally announced during President Ruto’s visit to Washington in May 2024, involves the construction of a large-scale facility powered by geothermal energy. The development is designed to provide cloud computing and Artificial Intelligence (AI) services across East Africa through the Microsoft Azure platform.

President Ruto recently highlighted that Kenya’s current installed electricity capacity of approximately 3,000 megawatts is insufficient to support a hyperscale data centre of this magnitude. He noted that such a facility could require up to 1,000 megawatts, which would strain the existing national grid.

According to Amb Thigo, these remarks were intended to spotlight the urgent need for expanded power generation. The government is currently working toward a target of increasing national capacity to 10,000 megawatts by 2030 to accommodate such intensive digital infrastructure.

Recent reports had suggested that negotiations faced challenges regarding power availability and financial guarantees for computing capacity. However, the State maintains that the project continues to move forward as part of a broader strategy to leverage Kenya’s renewable energy resources, particularly geothermal power.

The first phase of the project was initially expected to focus on a 100-megawatt capacity. Officials indicate that the long-term goal remains to build a robust technological ecosystem that can support world-class digital services without compromising the domestic power supply.

Amb Thigo reiterated that the government remains committed to scaling up energy production to ensure that major investments like the Microsoft-G42 site can thrive. He described the recent reporting of a suspension as a misinterpretation of the technical challenges being addressed.

The project site, planned for the Olkaria geothermal fields, is positioned to take advantage of the region's green energy. This alignment with renewable sources continues to be a primary factor in the country’s appeal to global technology firms seeking sustainable infrastructure locations.

As the state pushes for a tripling of power output over the next several years, the coordination between the energy and ICT sectors remains critical. For now, the administration insists that the roadmap for the KSh129 billion investment remains active.