NAIROBI — The Kenyan government has suspended a planned $1 billion Microsoft-backed data centre, with President William Ruto citing an insurmountable energy shortfall — a decision that analysts say underscores a critical challenge to Africa’s artificial intelligence ambitions.
The proposed “Silicon Savannah” project, announced with much fanfare during a state visit to Washington in May 2024, would have been one of the largest hyperscale data centres on the continent.
However, President Ruto revealed this week that the facility would have consumed so much electricity that it could have forced nationwide blackouts.
“To switch on that one data centre, we would need to shut off power for half the country,”
Ruto said, according to officials familiar with his remarks. He described the project as a “problem” given Kenya’s current grid constraints.
A Gigawatt Too Far
At its full buildout, the data centre was designed to draw 1,000 megawatts (1 gigawatt) of power — roughly one-third of Kenya’s entire installed capacity of about 3,000 megawatts. The initial phase called for 100 MW, but even that would have equalled the demand of a mid-sized industrial city.
Kenya’s grid already struggles with reliability. Data from the country’s energy regulator shows that customers experience an average of nearly nine hours of outages per month — far below the “five nines” (99.999%) uptime that hyperscale data centres require.
The grid also routinely curtails excess geothermal power because it lacks the transmission capacity to distribute what it already produces.
“This is not just about having enough megawatts,” said James Mwangi, a Nairobi-based energy analyst. “It’s about having a grid that can deliver power without flickering. Kenya isn’t there yet.”
More Than Just Power
While President Ruto framed the suspension as an energy issue, sources familiar with the negotiations point to deeper structural problems.
The National Treasury never formally approved the government’s funding portion of the deal, suggesting the financial model never closed.
Also, East Africa’s digital backbone remains thin: the entire region swaps just 2 terabits per second of internal internet traffic — less than a single hyperscale campus in the United States processes on its own.
You can build a massive building, but if the fibre isn’t there to feed it data, it’s a very expensive shell
There is also little existing demand. No African AI platform or cloud service currently requires a gigawatt-sized facility. Smaller, more commercially anchored projects, such as the 44 MW Nxtra data centre under construction in Tatu City, continue to move forward because they are sized to actual enterprise needs.
Geopolitical Aftermath
The Microsoft project was closely tied to US foreign policy. The Biden administration had promoted the deal as a strategic counterweight to China’s Huawei in East Africa’s digital space.
However, the involvement of Abu Dhabi-based G42 — which has historical ties to Chinese technology — caused delays in security clearances for advanced AI chips needed to run the facility.
With the project now suspended, the geopolitical win Washington had hoped for has failed to materialise.
What’s Next for Kenya?
Despite the setback, Kenya remains a target for digital investment. President Ruto has pivoted to a new goal of expanding national power generation to 10,000 MW by 2030 to support industrial growth, including future data centres.
Ambitious, I must say, and quite frankly, another promise in the pipeline of promisess, from the most the Promising president.
Other projects are already filling the gap. Oracle recently announced a partnership to host a public cloud region in Nairobi at a 22.5 MW facility, and Airtel’s Nxtra is proceeding with its 44 MW centre.
But for now, the suspension of the $1 billion Microsoft data centre sends a sobering signal: Africa’s AI ambitions will rise or fall on the strength of its power grids. And by that measure, the continent still has a long way to go.