Kenya Plans Cheaper, Standalone Licence for Data Centres

The Proposal responds to a mismatch that has existed since the Market Structure took effect. NFP-T2 was designed primarily for entities that establish and operate telecommunications network facilities across the country, whereas co-location data centres, as the Authority itself records, provide co-location, power and cooling services and do not transmit signals, use spectrum or provide subscriber-facing services.

Additionally, the change comes at a significant time for the sector, with Kenya’s data centre market valued at approximately USD 266 million in 2025 and projected to reach USD 805 million by 2031, with facilities of up to 44 MW already under construction. The licensing terms settled now will therefore govern much of the capacity being financed today.

The Proposal would also bring Kenya closer to the approach taken in other markets competing for data centre investment. For instance, Singapore’s Digital Infrastructure Bill, read for the first time in Parliament on 8 September 2026, aims to create dedicated licences for data centres directed at security, resilience and environmental sustainability. Kenya would also move ahead of Tanzania, which, under rules issued in March 2026, still licenses public data centres within its network facilities category.

We examine the proposed framework, its implications for data centre operators, investors and lenders, and the key issues to watch as Kenya develops its data centre regulatory landscape.

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Should you have any questions regarding data centres in Kenya, please reach out to Dominic Rebelo.

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Contributor
Collins Owino – Trainee Lawyer