Teraco CEO Jan Hnizdo. Picture: SUPPLIED
Teraco CEO Jan Hnizdo. Picture: SUPPLIED

Johannesburg — Teraco Data Environments, a data centre provider backed by Berkshire Partners, is investing $250m (R4bn) to build Africa’s largest facility on a single site, CEO Jan Hnizdo said in an interview on Monday.

The continent’s biggest data centre operator is starting construction on the facility in Johannesburg as it prepares to capitalise on the growing demand for internet and cloud-based services in the region. The development will be built in two phases through funding support from shareholders and its main lenders.

“We are building this latest data centre to hyperscale, as we expect additional large cloud providers will want to deploy here to ensure a good user experience for the growing African market,” Hnizdo said.

Global technology giants are competing to establish affordable and efficient ways to extend high-speed internet and data storage across the continent, where demand is picking up as hundreds of millions of people start accessing web services.

Amazon, Huawei Technologies and Microsoft have been among companies investing in data centre capacity in African countries in recent years. Other firms investing include Liquid Telecom, which raised more than $300m recently for data centres, and Actis, which will invest $250m in the sector.

Though Africa’s data centre capacity has doubled in the past three years, it still accounts for less than 1% of the global total, according to data from Xalam Analytics. The research firm expects demand for African data centres to grow three times faster than supply.

Teraco is investing at a time when the Covid-19 outbreak is accelerating digital take-up, as companies switch to remote working and content streaming amid government lockdowns to contain the pandemic.

The new facility will be the seventh data centre development by Teraco, which also operates in Cape Town and Durban.

“SA is strategically located at the tip of the African continent and, as a result, is positioned as a technology and data centre hub for Sub-Saharan Africa. This is further underpinned by growing undersea and fibre connectivity to the rest of Africa,” Hnizdo said.

Bloomberg

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