Kenya: Data Center Project and the Water Challenge of Lake Naivasha

Naivasha, Kenya – For communities around Lake Naivasha, water is not an abstract resource. It sustains families, livestock, farms, and schools.

This reality has become more acute after plans for a major Microsoft and G42 data center at Olkaria, near Lake Naivasha, were stalled in May 2026 due to concerns over available electricity capacity.

Microsoft and UAE-based artificial intelligence firm G42 announced the project in 2024 as part of a $1 billion digital investment package for Kenya. The proposed facility is expected to run on geothermal energy and expand to up to 1 gigawatt of capacity.

The uncertainty also raises questions about how another major industrial user could affect water resources in an area where residents already report shortages.

Microsoft and G42 have said the proposed data center campus will run entirely on renewable geothermal energy and use water-efficient technologies. The companies did not disclose specific water consumption figures for the project in their 2024 announcement.

Frank David Ochieng, communications director at Kenya Electricity Generating Company (KenGen), told Al Jazeera that the data center is still in the design phase and he could not comment further until the project is ready for implementation.

For residents like Musa Olorkedienye, who spoke to Al Jazeera, water scarcity is already a daily concern. He said communities around Olkaria have witnessed changes in water access, including the loss of reliable piped water that residents previously received from KenGen.

“Right now, we depend on water vendors, our livestock walk many kilometers, and we fear the situation could worsen as water demand increases,” Olorkedienye said.

Herder Isaac Leshishi, also speaking to Al Jazeera, said increasingly harsh weather is adding to the pressure.

Why Olkaria?

The choice of Olkaria is closely tied to energy. The area hosts Kenya's major geothermal operations, making it an attractive site for power-intensive facilities.

KenGen operates the Olkaria geothermal complex, while Microsoft and G42 plan to power the proposed data center entirely with geothermal energy.

A Lake Under Pressure

Naivasha is a freshwater lake in Kenya's Rift Valley, with a basin that supports agriculture, tourism, livestock, and domestic use. The basin is also home to geothermal development and other economic activities.

Grace Kimani, team leader of the Lake Naivasha and Oloiden patrol team, told Al Jazeera that the lake is under increasing pressure from population growth, agriculture, water abstraction, climate change, pollution, and ecosystem degradation.

“The planned Microsoft-G42 data center at Olkaria could bring jobs and investment, but its water demand raises concerns about adding pressure to already competing needs, especially during dry seasons,” she said.

Kimani noted that there is little public information about the project's expected water demand, water source, and cooling technology. She stressed the importance of transparency and cumulative impact assessments on water resources.

She also called for the use of water-efficient or water-free cooling technologies, water recycling, and treated wastewater use, as well as sustainable abstraction limits and community involvement in monitoring.

Silas Wanjala of the Lake Naivasha Riparian Association, speaking to Al Jazeera, said the area relies heavily on groundwater and declining river flows are increasing pressure.

“These industries, especially EcoCloud, which specializes in data processing, will consume a lot of water at a time when rivers are drying up and water demand is rising,” Wanjala said.

The Olkaria EcoCloud data center is the local partner in the G42-led project. In 2024, Kenya News Agency reported that G42, Microsoft, and EcoCloud had signed a letter of intent for the broader data center initiative, with EcoCloud described as a local partner that had previously signed a memorandum of understanding with G42.

Wanjala pointed to past fluctuations of Lake Naivasha as a warning.

“This lake in 2010 nearly dried up due to over-abstraction, and this could repeat due to high water demand from investors in Olkaria,” he said.

His concerns come against a broader backdrop of water scarcity in Kenya. The UN Food and Agriculture Organization (FAO) says Kenya has about 527 cubic meters of freshwater per person, below the 1,000 cubic meter threshold for water scarcity, and estimates that this could drop to about 475 cubic meters per person by 2030.

These figures do not show the specific impact of the proposed data center on Lake Naivasha, but they explain why the prospect of another major water user is drawing attention in an already high-demand area.

How Much Water Will the Project Use?

The amount of water the proposed Microsoft-G42 facility will need remains unclear. The project announcement did not provide expected consumption figures.

Existing industrial operations can provide some context. A KenGen environmental and social impact assessment report recorded 195,165 cubic meters of water abstracted from Lake Naivasha in July 2023 for domestic and commercial purposes at Olkaria as well as for operations and domestic use at Eburru.

Of that total, 153,918 cubic meters were used for commercial activities at Olkaria. The report noted that this abstraction was within the limits permitted by the Water Resources Authority (WRA).

These figures relate to KenGen's current operations, not the proposed data center.

For farmer Eskimos Kobia, who spoke to Al Jazeera, the potential competition extends beyond households and livestock. He said farmers, herders, schools, and investors will all face greater pressure as demand rises.

Kimani said climate change is also leading to fluctuations in lake levels, with periods of flooding alternating with prolonged dry conditions. “Water quality is affected by agricultural runoff, untreated sewage in some areas, and invasive species,” she said.

Investment and Local Concerns

Not everyone in Naivasha opposes the investment. Absolom Mukhuusi of the Naivasha Professionals Association, speaking to Al Jazeera, argued that the technology sector could bring jobs, infrastructure, and new businesses to the area. But he said economic benefits should not come at the expense of the local community.

“While we welcome investors, our biggest fear is what will happen to water and the community when water is diverted to Olkaria for large users,” he said.

Can Technology Help?

Geologist Kenyatta Otieno, speaking to Al Jazeera, sees another potential benefit. He recalled the pressure that large flower farms once placed on the lake's ecosystem, and many farms have since left or scaled back operations.

Otieno said the proposed center would include a resource hub to monitor lake levels and weather. Such monitoring, he said, could help determine peak water levels over time and guide land zoning near the lake.

“A center built with water conservation in mind would be futuristic because Naivasha is generally a water-scarce area. It would be a model for future development,” Otieno said.

Kenya already has regulatory bodies responsible for coordinating competing needs. The WRA manages water abstraction and issues water use permits, while the National Environment Management Authority (NEMA) oversees environmental impact assessments under the country's environmental legal framework.

Al Jazeera's attempts to reach WRA and NEMA officials were unsuccessful. Attempts to reach Microsoft-G42 officials and Kenyan government officials for comment on the project's status and water requirements were also unsuccessful.

According to KenGen, the project's final scale, design, and water requirements remain unclear at this time.

“We are competing with multi-billion-dollar companies for water, and we fear we will be the losers in the long run,” Leshishi said.