Africa’s data centre market is attracting significant foreign direct investment (FDI) and institutional investors, according to Ben Selier, Vice President of Secure Power for Anglophone Africa at Schneider Electric. Selier highlights the continent’s growing importance in helping global data centre developers meet their environmental, social, and governance (ESG) goals.
Over the past two years, Africa has seen numerous high-value transactions in the data centre sector. One of the most significant was the $3.5 billion acquisition of Teraco by Digital Realty. This deal followed Digital Realty’s earlier purchase of iColo, a Kenya-based platform with data centres in Nairobi and Mombasa. iColo is notable for its role in Africa’s central subsea cable access point.
Equinix, another major player, entered the African market by acquiring MainOne for $320 million, securing a presence in Ghana, Côte d’Ivoire, and Nigeria. In Johannesburg, NTT and Vantage Data Centres have committed more than $500 million to new data centres. Chinese cloud operators, such as China Mobile and Alibaba, have also established operations on the continent.
“Pan-African data centre operators like Africa Data Centres, Raxio, and PAIX are continuing to expand into new markets, including the Democratic Republic of Congo, Congo, Ghana, and Côte d’Ivoire,” said Selier. He also mentioned WINGU’s expansion into Somaliland, a region often considered challenging, where they are leading with 25MW data centre developments.
Emerging Hubs Beyond South Africa
Traditionally, South Africa has been the dominant player in Africa’s data centre industry due to its numerous subsea cable landing stations and established corporate markets. However, Selier noted the emergence of new hubs in countries such as Nigeria, Egypt, Kenya, and Morocco.
In Nigeria, demand from the financial services sector is driving the expansion of data centre capacity. The National Tier IV Data Centre in Kano is among the recent projects designed to support both private businesses and public sector organizations. The Kano centre serves as a backup to the Tier III data centre in Abuja.
Kenya, particularly Nairobi, continues to attract significant investor attention. However, according to Selier, the Kenyan government has not yet confirmed plans to migrate its IT infrastructure to public cloud providers like Google, AWS, or Microsoft, which could further accelerate data centre growth. On a positive note, Kenya’s energy mix, primarily consisting of biogas and geothermal energy, aligns well with ESG targets of data centre developers.
Balancing FDI and ESG Interests
Foreign direct investment is crucial for Africa’s economic growth, bringing capital, technology transfer, and job creation. However, Selier emphasized the need for African governments to manage this investment carefully. “It is important that African governments continue to strike a balance between attracting FDI and safeguarding their ESG interests,” he said. By doing so, they can ensure that data centre growth continues in a sustainable and responsible manner, positioning Africa as a data centre powerhouse.
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