A planned Microsoft data centre project in East Africa has been delayed following disagreements with the Kenyan government over the company’s demand for guaranteed payments.

This was disclosed in a Bloomberg report on Sunday, citing sources familiar with the discussions.

In May 2024, Microsoft teamed up with UAE-based artificial intelligence company G42 to invest $1 billion in a data centre in Kenya, part of a broader push to expand cloud computing services across East Africa.

The initiative was announced during President William Ruto’s state visit to Washington under the Biden administration.

The facility was designed to operate بالكامل on geothermal energy and to provide East Africa with access to Microsoft’s Azure services through a dedicated regional cloud hub.

According to the report, Microsoft and G42 sought a commitment from the Kenyan government to purchase a minimum level of capacity each year.

However, negotiations stalled after the government was unable to meet the scale of guarantees the company requested.

The report added that the consortium may eventually opt to scale down the project.

Kenya is continuing discussions on the project, and “it is not failed or withdrawn,” Bloomberg quoted the report quoted Secretary at the Ministry of Information, John Tanui, as saying in an interview.

“The scale of ‌the data center they wanted to do still requires some structuring,” he said, adding that power requirements are still under discussion.