Microsoft Plans to Build Massive Data Centre; President Worries About Power Outages
Microsoft Plans to Build Massive Data Centre; President Worries About Power Outages
Jakarta, CNBC Indonesia - Microsoft and G42, an Abu Dhabi-based artificial intelligence (AI) company, initially planned to build a $1 billion data centre in Kenya. This was seen as a positive development for the country’s digital transformation.
The project promised significant foreign investment and the use of environmentally friendly geothermal energy. However, Kenya now faces a crucial problem: limited electricity supply to support the operation of the AI data centre.
According to Detik.com, Sunday (17/5/2026), the project, announced in May 2024, is planned to be built in the Olkaria geothermal area, in Kenya’s Rift Valley. The infrastructure will be built by G42 and used by Microsoft to provide a new Azure cloud region in East Africa.
Threat of Widespread Power Outages
In the initial phase, the AI data centre is estimated to require up to 100 Megawatts (MW) of electricity. In the future, its capacity is even targeted to be expanded to reach 1 Gigawatt (GW). This is where the main problem lies.
For comparison, Kenya’s total installed electricity capacity is currently only around 3 to 3.2 GW. Meanwhile, the national peak electricity consumption was recorded at 2.4 GW in January.
Realising the magnitude of the power requirement, Kenyan President William Ruto openly admitted that the government may be forced to cut off electricity in half of the country if Microsoft’s AI data centre operates at full capacity.
Even for the initial phase, which “only” requires 100 MW, this project will consume a very significant portion of the total production of the Olkaria geothermal complex, which generates around 950 MW.
Hindered by Financial Guarantees
In addition to the electricity supply issue, reports reveal that Microsoft and G42 also demanded that the Kenyan government provide annual payment guarantees for a certain capacity of the data centre.
The negotiations eventually reached an impasse because the Kenyan government was unable to provide the financial guarantees requested by the Redmond-based company.
Although this project has not been officially cancelled, local officials admit that the scale of the project still needs restructuring, indicating that the plan is not progressing smoothly.