NAIVASHA, Kenya – Plans for a major Microsoft-G42 data centre in Olkaria, near Lake Naivasha, have stalled, raising concerns among local communities about the growing pressure on the region's already strained water resources. The project, announced in 2024 as part of a $1 billion digital investment package for Kenya, was intended to be powered by renewable geothermal energy.

The proposed facility was slated to run on geothermal energy and potentially scale up to 1 gigawatt of capacity. However, its progress was halted in May 2026 due to concerns regarding available power capacity. This pause has amplified existing anxieties about the water consumption of such a large industrial user in a region where residents already report significant water shortages.

Microsoft and G42 have stated that the data centre campus would operate entirely on renewable geothermal energy and incorporate water conservation technologies. However, they did not provide specific water consumption figures for the project at the time of its announcement. Local residents, like Musa Olorkedienye, report a decline in reliable water access, forcing reliance on water vendors and long distances for livestock.

Pastoralist Isaac Leshishi added that increasingly harsh weather conditions exacerbate the existing water scarcity, making the prospect of a new, water-intensive facility a significant worry for the community. The choice of Olkaria for the data centre was driven by its status as the hub for Kenya's major geothermal operations, making it an attractive location for power-dependent industries.

Lake Naivasha, a vital freshwater source in Kenya's Rift Valley, supports agriculture, tourism, livestock, and domestic water use. Its basin is also central to geothermal development and other economic activities. Grace Kimani, a patrol leader with a local environmental group, highlighted that the lake is already under considerable pressure from population growth, agricultural abstraction, climate variability, pollution, and ecosystem degradation.

Kimani expressed that while the data centre could bring jobs and investment, its potential water demand poses a serious concern, especially when competing with existing needs, particularly during dry seasons. She noted a lack of transparency regarding the project's specific water footprint.

The Kenya Electricity Generating Company (KenGen), which operates the Olkaria geothermal complex, stated that the data centre remains in the design phase. Frank David Ochieng, KenGen's communications director, indicated that further comments would be made once the project is closer to proceeding.

This situation underscores a broader challenge for Kenya as it pursues ambitious technological development, balancing the promise of digital investment with the critical need to protect its natural resources and ensure the well-being of its communities.