• Home
  • /
  • Enterprise
  • /
  • Africa Data Centres in expansion drive after R2bn funding

Africa Data Centres in expansion drive after R2bn funding

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 18 Jun 2024
Africa Data Centres owns Africa's largest network of interconnected, carrier and cloud-neutral data centre facilities.
Africa Data Centres owns Africa's largest network of interconnected, carrier and cloud-neutral data centre facilities.

Data centre provider Africa Data Centres has secured R2 billion in funding, as it plans to increase its data centre capacity in South Africa.

According to the Cassava Technologies-owned company, the funding will allow it to expand its data centre capacity and meet the growing demand for cloud computing services in South Africa.

The funding was facilitated through a bespoke financing solution arranged by Rand Merchant Bank (RMB).

According to Africa Data Centres, the financing agreement demonstrates the strong financial position of the company and its commitment to investing in the digital transformation of South Africa.

RMB acted as the coordinator, initial mandated lead arranger and Bookrunner on the R2 billion financing facility.

“This funding is a significant milestone in the growth of Africa Data Centres,” says Hardy Pemhiwa, president and group CEO of Cassava Technologies.

“It underscores our commitment to growth and our confidence in the future of the South African data centre market. The additional funding will allow us to support the digital transformation journeys of our customers. Data Centres are key to delivering on our vision of a digitally connected future that leaves no African behind.”

Africa Data Centres operates a network of hyper scale and edge data centres across Southern, East and West Africa.

The company owns three data centres in South Africa – in Midrand (JHB1), Centurion (JHB2) and Elfindale, Cape Town (CPT1). Its fourth data centre (CPT2) is expected to go live this year.

According to the company, the R2 billion financing will enable Africa Data Centres to accelerate and expand its hyperscale data centre capacity by an additional 20MW, furthering its position as a leading player in the African data centre space enabling it to provide quality inter-connected, carrier and cloud-neutral data centre facilities.

In November 2022, Africa Data Centres announced it had secured an investment of almost R4 billion to expand its two Johannesburg-based data centres from 30MW to 100MW of IT load.

Exponential growth

Cassava Technologies now operates the largest independent pan-African terrestrial fibre broadband network, covering more than 300 towns and cities across Africa.

As data demand and cloud adoption continue to cause a surge in traffic, data centres are becoming increasingly important on the continent.

The African data centre market by investment was valued at $2 billion in 2020, and is expected to reach a compound annual growth rate of 15% between 2020 and 2026, according to Reportlinker.

Contributing factors to this growth include renewable power availability, smart city initiatives and increased support for the digital economy, notes the report.

As of 2023, Africa is home to over 100 data centres, with SA, Nigeria Kenya, Egypt, and Morocco having all recorded different levels of data centre activity over the last five years.

Africa Data Centres says its vision is to unveil various business opportunities and develop a strategic network of partnerships to further strengthen and grow its market share in Africa, while providing interconnected, carrier- and cloud-neutral data centre facilities.

“The data centre space presents a significant digital infrastructure opportunity, as there is currently a large deficit of supply versus demand,” says Nana Phiri, head of corporate client group at RMB.

“With the exponential growth in demand for data centre capacity in Africa, we are proud to partner with Africa Data Centres as they facilitate digital transformation across the continent. We see this funding as part of RMB’s mandate of financing the development of a sustainable digital economy in South Africa”.