Microsoft-G42 Data Center Stalls in Kenya Amid Water Concerns

Project delays expose resource tensions

A major data center project planned by Microsoft and UAE-based AI company G42 near Kenya's Lake Naivasha has stalled, bringing into focus a question facing communities worldwide: how to balance AI infrastructure expansion with local resource constraints.

The facility, announced in 2024 as part of a $1 billion digital investment package, was designed to run on geothermal energy from the nearby Olkaria complex and eventually scale to 1 gigawatt of capacity. According to Al Jazeera, which first reported these details, the project halted in May 2026 over concerns about available power capacity.

But the pause has also intensified scrutiny over what the facility would mean for water availability in a region where residents already report shortages.

Why it matters

Data centers require substantial water for cooling systems, and their placement in water-stressed regions creates direct competition with agriculture, households, and ecosystems. Kenya has approximately 527 cubic meters of freshwater per person annually—below the UN threshold for water scarcity—and that figure is projected to decline further by 2030. The Naivasha case illustrates a broader challenge: as countries court AI investment for economic development, they must weigh infrastructure benefits against environmental capacity and community needs.

Community concerns mount

Residents around Olkaria told Al Jazeera they've already experienced changes in water access. Musa Olorkedienye, a local resident, said communities have lost reliable piped water supplies previously provided by Kenya Electricity Generating Company (KenGen), which operates the geothermal complex. "Currently, we are relying on water vendors to get water, our animals are walking for kilometres, and we fear things could get worse as demand for water rises," he said.

Pastoralist Isaac Leshishi pointed to climate pressures compounding the situation, saying increasingly harsh weather is adding stress to water systems.

Lake Naivasha under pressure

Lake Naivasha, a freshwater body in Kenya's Rift Valley, supports agriculture, tourism, livestock, and domestic use across its catchment area. Grace Kimani, a patrol leader with Lake Naivasha and Oloiden, told Al Jazeera the lake faces growing pressure from population growth, agriculture, water abstraction, climate variability, and pollution.

Kimani said limited public information exists about the project's expected water demand, source, and cooling technology. She called for transparency, water-efficient or water-free cooling systems, water recycling, and community involvement in monitoring.

Silas Wanjala of the Lake Naivasha Riparian Association noted the region's heavy dependence on groundwater and declining river flows. He referenced a 2010 period when the lake nearly dried up due to over-abstraction, warning that high industrial demand could repeat that scenario.

Unclear water requirements

Neither Microsoft nor G42 disclosed project-specific water consumption figures in their 2024 announcement. KenGen communications director Frank David Ochieng told Al Jazeera the data center remains at the design stage and declined further comment until the project is ready to proceed.

For context, a KenGen environmental assessment recorded 195,165 cubic meters of water abstracted from Lake Naivasha in July 2023 for domestic and commercial uses at Olkaria and Eburru, with 153,918 cubic meters used for commercial operations at Olkaria. Those figures relate to existing operations, not the proposed data center, and were within Water Resources Authority permitted levels.

Balancing investment and impact

Not all local voices oppose the investment. Absolom Mukhuusi of the Naivasha Professional Association told Al Jazeera the technology sector could bring jobs, infrastructure, and new businesses—but economic benefits should not come at community expense.

Geologist Kenyatta Otieno suggested the proposed center could include a resource monitoring facility to track lake levels and weather patterns, potentially serving as a model for future development in water-scarce areas.

Attempts by Al Jazeera to reach Microsoft-G42 officials, Kenya's Water Resources Authority, the National Environment Management Authority, and government officials for comment were unsuccessful. The project's eventual scale, design, and water requirements remain unclear.

Details in this report were first published by Al Jazeera.