Can Kenya’s AI ambitions coexist with Naivasha’s water needs?

Estimated reading time: 6 minutes · Last updated: 2026-08-24

Microsoft and UAE firm G42 proposed a large data centre at Olkaria in 2024 as part of a $1bn digital investment package that could scale to 1 gigawatt of capacity, but plans stalled in May 2026 amid concerns about available power and local resources. The companies say the campus would run on geothermal power and include water-conservation technology, yet they provided no project-specific water consumption figure. KenGen says the project remains at design stage and declined to comment further. Local residents and lake monitors say Naivasha’s basin already faces competing demands for domestic use, farming and industry. This reporting, as first reported by Al Jazeera, shows the facility’s water needs remain unclear.

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.

Musa Olorkedienye

Why Olkaria was chosen and what stalled the plan

Olkaria hosts Kenya’s large geothermal complex, which is why Microsoft and G42 selected it for a power-hungry campus. The partners announced the initiative in 2024 inside a $1bn digital package and described a build that could eventually reach 1 gigawatt of capacity. That size matters because data centres consume both electricity and, depending on design, cooling water at scale.

In May 2026 the project stalled amid concerns about power capacity and broader resource questions. KenGen, which operates the Olkaria fields, told local reporters that the proposal remains at the design stage and that it could not comment further until the plan is ready to proceed. The companies’ public statements say the campus would run on geothermal energy and incorporate water-conservation measures, but they did not disclose any project-specific water-consumption figure.

Because the facility was pitched as geothermal-powered, proponents frame it as a renewable anchor for digital industry. Opponents counter that even a renewably powered site can create new local demand for water if cooling or other processes rely on freshwater abstraction.

Naivasha’s water pressures in numbers

Lake Naivasha sits in a basin that supports farming, tourism, livestock and households while hosting geothermal and other industries. That mix has tightened competing claims on groundwater and surface water, including the River Malewa catchment that feeds the lake.

National context sharpens the local picture. The Food and Agriculture Organization records about 527 cubic metres of freshwater available per person in Kenya, well below the 1,000-cubic-metre threshold commonly used to mark water scarcity, and it says availability could fall to about 475 cubic metres per person by 2030. Locally, monitors point to past swings in lake level — in 2010 the basin nearly dried — and to pollution, invasive species and variable rainfall as factors that reduce buffer capacity.

Community voices and conservation groups therefore view any large new industrial user as a potential multiplier of stress during dry spells unless its water sourcing and recycling are explicit and strictly regulated.

What KenGen’s numbers show about current extraction

A KenGen environmental and social impact assessment records that 195,165 cubic metres of water were abstracted from Lake Naivasha in July 2023 for domestic and commercial uses at Olkaria and for operations at Eburru. Of that total, 153,918 cubic metres were used for commercial operations at Olkaria. The assessment records the abstraction as within Water Resources Authority permitted levels.

Those figures cover existing operations, not the proposed Microsoft-G42 campus, but they show how commercial activity already accounts for the majority of that month’s abstraction. Calculating the share from the assessment’s figures gives a commercial-use share of roughly 79 percent of the July 2023 abstraction, which illustrates why local groups fear additional large industrial demand.

Advocates for the lake say that cumulative impact assessments — which add proposed new users to existing withdrawals and climate-driven supply changes — are the right tool to determine whether permits should change or extraction be capped.

Technical choices and who oversees them

Project design choices determine how much freshwater a campus would need. Data centres can use air-cooled servers, closed-loop water systems, evaporative cooling or treated wastewater; each option has different water and energy trade-offs. Local advocates told reporters they want water-efficient or water-free cooling, onsite recycling and use of treated effluent where feasible.

Kenya’s regulatory framework assigns the Water Resources Authority to license abstraction and the National Environment Management Authority to oversee environmental impact assessments. Several local interviewees told reporters they have not seen sufficient public disclosure of the proposed centre’s expected water source, cooling technology or mitigation plans, and they called for community involvement in monitoring.

Some local experts argue a well-specified monitoring centre — the kind the project’s proponents reportedly planned to include — could provide useful hydrological data for zoning and long-term planning if built with community access and clear transparency rules.

Two ways this could play out

The bottom line

The core tension is simple: a geothermal-powered campus can lower greenhouse-gas emissions while still adding local demand for water if cooling or operations rely on freshwater. The partners framed the Olkaria site around renewable energy and promised conservation measures, but they provided no project-specific water figures and the plan stalled in May 2026. Existing KenGen data for July 2023 show commercial use already dominates that month’s abstraction, and national FAO figures place Kenya below common scarcity thresholds. That combination makes transparent, cumulative-impact assessment and clear commitments on cooling and treated wastewater the decisive factors for whether the project can coexist with Naivasha’s water needs.

What to watch

• Watch for any Water Resources Authority decision on new or revised abstraction permits for Olkaria; no date has been set.
• Watch for publication of a project environmental impact assessment that discloses projected water use, cooling technology and proposed mitigation; no date has been set.