Kenya's dilemma in balancing power shortages, UN green goals, and a data centre real estate boom

Amid a new push by the United Nations (UN) for data centres to transition to renewable energy and disclose their environmental footprints, Kenya appears to be at the crossroads.

While the rest of the world is discussing how data centres are the new power hogs, hence the UN’s sustainability drive, Kenya is balancing between keeping households lit and providing power for data centres.

In the background is a real estate sector that is swaying towards data centres, preparing for a surge in demand for these spaces. It is a revelation that President William Ruto has acknowledged publicly.

He revealed some time back the shock he got when he landed home from the United States, where he had signed a deal with Abu Dhabi-based technology company specialising in AI, G42, and Microsoft, to set up a data campus in Kenya.

“When I came back, I was told one data centre requires 1,000 megawatts (MW), and we have 2,300MW. So, if we have to build the data centre, we have to shut down half the country,” he said.

He noted that Kenya needs about 10,000 MW to host such infrastructure in addition to growing manufacturing and industrialisation.

At the first Global Dialogue on Artificial Intelligence convened by the United Nations this week, the UN Chief Antonio Guterres noted the challenges now being created by data centres to communities.

Apart from being power guzzlers, data centres are said to affect the land and water ecosystems.

“Data centres already consume more electricity than most countries. By 2030, they could use more electricity than all but five nations and enough water to meet the needs of 1.3 billion people in sub-Saharan Africa,” he said.

He also pointed out that too often, the communities hosting these centres do not benefit directly.

It is these findings that informed the UN to come up with an AI environmental transparency initiative which calls on AI companies to disclose the full footprint of their data centres on carbon, water and land.

“And commit to power every data centre with renewable energy by 2030,” he said. Perhaps, in cognisance of these environmental changes, Kenya set up an industrial green park at Olkaria, Nakuru County, which largely targets power-hungry businesses such as data centres, as it is in the vicinity of geothermal power sources managed by Kenya Electricity Generating Company (KenGen).

In June 2026, the Green Energy Park was officially gazetted as a customs-controlled area, which is expected to unlock its full potential as a Special Economic Zone (SEZ). “Power is a big challenge,” says Mitesh Shah, co-chair and Managing Director of Mitsumi Distribution, a technology solution provider with footprints in 36 markets on the continent.

“Our request to the government is to see how we can get cost-effective power solutions like solar farms or investors to work with on solar energy.”

He notes that sometimes putting a data centre in a remote place may not make business sense, as technical people have to be stationed there for backup.

However, the company, which has unveiled plans to set up a Sh260 million ($2 million) AI platform, targeting university students and startups, says if this plan materialises, it still has a way to make the cost accessible. “I don’t have an answer yet on how we will address (power),” adds Shah.

"Our cost might be a little bit higher, but the good thing is our labour is not that expensive.” The Kenya Market Report by Knight Frank for the second half of 2025 notes how data centres and SEZs are slowly taking shape as the alternative market in the real estate space.

“Data centre development emerged as one of the standout stories of H2 (second half) 2025, reinforcing Kenya’s position as East Africa’s leading digital hub,” says the real estate consultancy, citing the ground-breaking of Airtel Africa’s Nxtra data centre at Tatu City, a 44 MW facility designed for cloud computing and AI workloads, Knight Frank notes that the data centre market is maturing rapidly, with facilities targeting global certification standards, including LEED equivalent benchmarks and accreditations from the Uptime Institute, a global authority in the data centre sector. “In 2026, the alternative assets market is expected to see the delivery of new data centres and the announcement of further expansion phases,” it adds.