Kenya’s data centre industry could soon have its own licensing category as the Communications Authority of Kenya (CA) moves to tighten oversight of the rapidly growing digital infrastructure sector.
The regulator has proposed a standalone licence for data centre operators, replacing the current arrangement where co-location data centres are regulated under the Network Facilities Provider-Tier 2 (NFP-T2) licence.
The proposed framework is aimed at giving data centre operators clearer regulatory requirements while allowing the CA to have better visibility of activities in the sector.
In an update on Tuesday, September 8, 2026, the Authority said the new licensing approach would also help create a more supportive environment for investment in Kenya’s digital infrastructure.
“CA is proposing a standalone licensing framework for Data Centres to provide greater regulatory clarity, enhance visibility of data centre operations and support investment in Kenya’s digital infrastructure,” the regulator said.
The proposed licence would apply to companies providing co-location data centre services and related supporting services.
Under the new arrangement, the CA would regulate data centres based on the nature of their operations instead of placing them under a wider telecommunications infrastructure licence.
The Authority said it was proposing a specific Data Centre licence rather than continuing to regulate co-location facilities through the NFP-T2 category.
“CA proposes to introduce a standalone Data Centre licence category, rather than regulate co-location data centres under the Network Facilities Provider-Tier 2 licence category.”
The CA said the proposed system is also intended to bring Kenya’s licensing approach closer to what it described as proportionate frameworks used in comparable jurisdictions.
The move comes as demand for data storage, cloud computing, artificial intelligence, digital services and enterprise connectivity continues to grow, increasing the importance of data centres to Kenya’s digital economy.
The Ministry of Information, Communications and the Digital Economy said in May that Kenya was increasingly becoming a preferred destination for global data centres and artificial intelligence infrastructure.
The ministry attributed the growing interest to the country’s expanding connectivity, supportive regulation, renewable energy potential and rising regional demand for cloud and artificial intelligence services.
Investment in data centre infrastructure has also been growing.
Construction of a 44-megawatt data centre by Nxtra by Airtel Africa at Tatu City is expected to make the facility the largest of its kind in East Africa when completed in the first quarter of 2027.
The government says the facility will support cloud computing, artificial intelligence, high-performance computing and other technology-intensive services.
Kenya’s digital infrastructure is also supported by international submarine cable connections, expanding fibre networks and a growing number of data centre operators.
A 2026 market analysis estimated the country’s data centre market at Sh34.314 billion in 2025 and projected it to grow to about Sh103.845 billion by 2031.
The proposed licensing framework builds on the National ICT Policy Guidelines, which call for the development of standards for data centres and encourage private-sector investment in neutral data centres.
The policy also recognises data centres as important infrastructure for local hosting, connectivity and digital services.
The CA has now opened the proposed licensing framework to public participation and is seeking views from the industry before making a final decision.
Data centre operators, technology companies, investors, other stakeholders and members of the public have been invited to review the proposal and submit their views.
The Authority has given interested parties 30 days from the date of publication of the public notice to submit written comments to the Director General of the Communications Authority of Kenya.
Submissions can be made through post or hand delivery to the CA’s offices in Nairobi. Comments can also be submitted electronically through the designated online platform or by email through [email protected].
The consultation will give industry players and other stakeholders an opportunity to raise concerns, suggest changes and make recommendations before the proposed framework is finalised.
If adopted, the new licensing regime would give data centre operators a clearer regulatory path while giving the CA greater oversight of an industry that is becoming increasingly important to Kenya’s digital economy.