The cause of diabetic kidney disease is due to the kidney unable to filter the excessive blood with high glucose (sugar) levels caused by diabetes.
The kidneys has millions of tiny capillaries (tiny blood vessels) which acts as waste filters. As blood flows through them, waste products are filter out and become part of the urine. Useful substances such as protein and red blood cells are too large to pass through these filters and therefore remain in the blood.
Due to diabetes and the excessive blood with high levels of glucose (sugar) the kidneys requires extra work to filter. Overtime, with extra work on the kidney, leaks start to happen. Hence, useful protein is lost through the urine. This is known as microalbuminuria. When larger amounts of protein are lost, it is known as macroalbuminuria.
As the disease progresses, more albumin leaks into the urine and the filtering function begins to drop. Various wastes are retained in the body. Regular blood test can measure the decline in kidney filtration. As kidney damage develops blood pressure often rises too.