Kenya is set to introduce a dedicated regulatory framework for data centres as the Communications Authority of Kenya (CA) moves to create a standalone licence for operators of co-location facilities.
In a public notice issued on Tuesday, September 8, the regulator proposed introducing a specific Data Centre licence category, replacing the current arrangement where co-location data centres are regulated under the Network Facilities Provider (NFP) Tier 2 licence.
The CA explained that the proposed framework is intended to provide greater regulatory clarity, enhance visibility over data centre operations and support investment in Kenya’s digital infrastructure.
The proposed licence would apply to companies providing co-location data centre services, including related supporting services.
The regulator is now seeking views from industry stakeholders and members of the public before the framework is finalised. Interested parties have been given 30 days from the publication of the notice to submit their comments.
The proposal comes as Kenya’s data centre industry expands rapidly, driven by increasing demand for cloud computing, artificial intelligence, digital financial services, enterprise technology and other data-intensive services.
Kenya’s data centre market was estimated at Ksh34.3 billion in 2025 and is projected to grow to approximately Ksh103.8 billion by 2031, highlighting the scale of investment expected in the sector.
Nairobi has emerged as the country's main data centre hub, with major international and local operators expanding their capacity to meet growing demand.
The latest addition came on Monday, September 7, when Digital Realty launched its Nairobi Two (NBO2) data centre, adding 6.4 megawatts (MW) of capacity to its Nairobi campus. The facility is operated through Digital Realty’s iColo business and is expected to strengthen Kenya’s position as a regional hub for cloud services, connectivity and digital infrastructure.
Other major investments are also underway. Airtel Africa’s data centre business, Nxtra, is developing a 44MW data centre facility in Kenya, adding to the growing pipeline of large-scale digital infrastructure projects.
The expansion has increased the importance of clear rules governing facilities that provide businesses with space, power, cooling, security and connectivity to host servers and other computing equipment.
The CA’s proposal would effectively recognise data centres as a distinct category of digital infrastructure rather than placing co-location operators within the broader NFP Tier 2 framework.
The Authority’s current telecommunications market structure, introduced in April 2026, places NFP licences under the national infrastructure category. The proposed data centre licence would create a more specialised regulatory pathway for operators in the sector.
The regulator believes the approach will improve oversight while creating greater certainty for investors entering Kenya’s data centre market.
The CA also wants the framework to align Kenya’s approach with proportionate regulatory models adopted in comparable jurisdictions.
Stakeholders can submit their comments through post or hand delivery to the Director General, Communications Authority of Kenya, P.O. Box 14448-00800, Nairobi. Electronic submissions can be made through the Authority’s designated online platform or sent to datacentres@ca.go.ke.
The consultation is significant for an industry that is becoming increasingly important to Kenya’s digital economy, particularly as demand for artificial intelligence and cloud computing drives the need for more computing capacity.
If adopted, the new framework would give data centre operators a dedicated licensing regime while giving the CA greater visibility over an industry attracting increasingly large investments.
For now, the proposed licence remains subject to public participation, with the Authority expected to consider stakeholder submissions before deciding on the final regulatory framework.
