Hi AK
Thanks for using the Q&A platform.
The error suggests that while postgres_fdw is available, it is not allow-listed by Microsoft for self-installation by customers.
Kindly confirm if the extension is allowed. You can list allowed extensions using:
SELECT * FROM pg_available_extensions WHERE name = 'postgres_fdw';
If it appears but isn't installable, it's not yet allow-listed for your server/region/tier.
Kindly follow the steps to see if you can allowlist the extension: https://learn.microsoft.com/en-us/azure/postgresql/extensions/how-to-allow-extensions?tabs=allow-extensions-portal
If that doesn't work, you'll need to request that Microsoft allow-list it for your Azure PostgreSQL Flexible Server instance.
Use the following link to raise support with Azure Microsoft support: https://portal.azure.com/#view/Microsoft_Azure_Support/HelpAndSupportBlade/~/overview
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Regards,
Obinna.