Microsoft’s G42-Backed Kenya Data Center Pauses Over Payment Dispute
Microsoft’s planned G42 partnership to build a multi-megawatt data centre campus in Kenya has been suspended after G42 demanded revised upfront payment terms, halting site preparations. The delay threatens to push back Azure’s targeted East Africa service launch and could raise project costs as parties renegotiate financing.
1. Suspension of Kenya Data Centre
Microsoft and Abu Dhabi-based G42 have halted construction of their agreed multi-megawatt data centre in Kenya after G42 requested changes to the initial payment schedule. All earthworks and equipment ordering were put on hold in early May pending revised financial commitments.
2. Impact on Azure Rollout
The project was set to form the backbone of Azure’s first major East Africa node, with a planned 2027 service launch. Delays risk slowing regional cloud adoption, forcing enterprises to continue relying on distant facilities and potentially affecting Microsoft’s growth forecasts for the continent.
3. Negotiation Outlook
Both companies are in talks to renegotiate deposit amounts and milestone payments, with G42 seeking higher security guarantees. A resolution could adjust total investment and timelines, though any extended impasse may further escalate costs and extend the project’s completion date.