Starting an AKS cluster with Terraform – Nginx

I am trying to use Terraform to create an AKS cluster, then deploy a basic loadbalacer and finally get Nginx-ingress-controller to use the Loadbalancer.

Here is my Terraform code so far,

# Set default name prefix
variable "name_prefix" {
  default = "Dev"
}

# Set default location
variable "location" {
  default = "australiacentral"
}

# Create Resource Group
resource "azurerm_resource_group" "aks_rg" {
  name     = "${var.name_prefix}-rg"
  location = var.location
}

# Managed Cluster resource group
#export MC_RESOURCE_GROUP=MC_${RESOURCE_GROUP}_${AKS_CLUSTER}_${LOCATION}

resource "azurerm_kubernetes_cluster" "dk_dev_cluster" {
  name                = var.name_prefix
  location            = azurerm_resource_group.aks_rg.location
  resource_group_name = azurerm_resource_group.aks_rg.name
  dns_prefix = "Dev"
  kubernetes_version = "1.25.5"
  # Create a basic load-balancer to lower costs
  network_profile {
    network_plugin = "azure"
    load_balancer_sku = "basic"
  }

  identity {
    type = "SystemAssigned"
  }

  default_node_pool {
    name    = lower("${var.name_prefix}nodep")
    vm_size = "Standard_B2s"
    node_count = 1
    enable_auto_scaling = false
  }

  tags = {
    Environment = "Dev"
  }
}

resource "azurerm_public_ip" "lb_pub_ip" {
  name                = "${var.name_prefix}-lb-ip"
  location            = var.location
  allocation_method   = "Static"
  sku = "Basic"
  resource_group_name = azurerm_kubernetes_cluster.dk_dev_cluster.node_resource_group
}

resource "azurerm_lb" "aks_lb" {
  name                = "${var.name_prefix}-lb"
  sku                 = "Basic"
  location            = var.location
  resource_group_name = azurerm_kubernetes_cluster.dk_dev_cluster.node_resource_group
  frontend_ip_configuration {
    name                 = "PublicIPAddress"
    public_ip_address_id = azurerm_public_ip.lb_pub_ip.id
  }
}

output "client_certificate" {
  value     = azurerm_kubernetes_cluster.dk_dev_cluster.kube_config.0.client_certificate
  sensitive = true
}

output "kube_config" {
  value = azurerm_kubernetes_cluster.dk_dev_cluster.kube_config_raw

  sensitive = true
}

# Create a kubeconfig file that can be added to/replace ~/.kube/config
resource "local_file" "kubeconfig" {
  depends_on   = [azurerm_kubernetes_cluster.dk_dev_cluster]
  filename     = "kubeconfig"
  content      = azurerm_kubernetes_cluster.dk_dev_cluster.kube_config_raw
}

provider "kubernetes" {
  config_path = local_file.kubeconfig.filename
  config_context = "Dev"
}

resource "kubernetes_namespace" "nginx_namespace" {
  metadata {
    name = "nginx-ingress"
  }
  depends_on = [local_file.kubeconfig]
}

provider "helm" {
}

resource "helm_release" "nginx_ingress" {
  name       = "nginx-ingress-controller"

  repository = "https://kubernetes.github.io/ingress-nginx"
  chart      = "ingress-nginx"
  version    = "4.5.2"
  namespace = kubernetes_namespace.nginx_namespace.id

  set {
    name  = "controller.service.loadBalancerIP"
    value = azurerm_public_ip.lb_pub_ip.ip_address
  }
}

When the look at services in the nginx-ingress namespace the LoadBalacer external IP is stuck as <pending>

NAME                                                          TYPE           CLUSTER-IP    EXTERNAL-IP   PORT(S)                      AGE
nginx-ingress-controller-ingress-nginx-controller             LoadBalancer   10.0.60.72    <pending>     80:32183/TCP,443:31864/TCP   27s

kubectl get events:

41s         Warning   SyncLoadBalancerFailed   service/nginx-ingress-controller-ingress-nginx-controller                 Error syncing load balancer: failed to ensure load balancer: instance not found

From my understanding this is because nginx cannot reach the load balancer as the AKS cluster is in the non Managed resource group, while the LB is in the Manged resource group. I cannot figure out a way to deploy them into the same resource group.

Please let me know how I can allow Nginx to connect to the Loadbalancer.