(Ecofin Agency) - Reliable energy is essential for connectivity and technology use, as digital infrastructure heavily depends on a stable power supply. Therefore, countries must invest in dependable energy sources to support the growing adoption of digital technology across Africa.

Digital Realty company Teraco announced on November 12 that it had initiated the construction of a major 120MW utility-scale solar photovoltaic (PV) power plant in South Africa’s Free State province. This development marks a milestone in Teraco’s long-term strategy to power its data centers with renewable energy, supporting a low-carbon energy foundation to meet the rising demand for cloud and AI-driven applications among its clients.

For Teraco CEO Jan Hnizdo, “This represents a unique, holistic approach since Teraco plans to not only own its data centres, but also to power them with a renewable energy source, creating a sustainable path to growth.”

Reliable energy is crucial for connectivity and technology utilization, but South Africa's persistent energy supply challenges have impeded economic growth and inclusion. Digital infrastructure, including data centers, relies significantly on stable energy and large volumes of water for cooling systems. In addition to energy concerns, sustainability has become a growing priority. According to the National Policy on Data and Cloud 2024, South Africa must encourage data center providers to implement self-sustaining energy and water solutions while also reducing carbon emissions to minimize environmental impact.

The solar plant, expected to be operational by late 2026, will generate clean energy for Teraco’s data centers across South Africa, spanning locations in Cape Town, Durban, and Johannesburg. The plant is being developed in partnership with JUWI, which will lead in the design, procurement, construction, and commissioning of the facility, alongside Subsolar.

In addition to construction, Teraco has secured grid capacity allocation from the public utility Eskom, following a landmark wheeling agreement with Eskom and the municipalities of Ekurhuleni and Cape Town. This agreement allows Teraco to transfer renewable power from outlying areas to urban data centers through Eskom’s existing transmission infrastructure.

To ensure stable energy transmission, Teraco will also collaborate with Eskom to upgrade its transmission infrastructure, supporting grid modernization efforts essential for reliable data center operations.

The announcement aligns with South Africa’s ongoing shift toward renewable energy, particularly in the data center sector. In March 2023, Africa Data Centres signed a 20-year Power Purchase Agreement (PPA) to supply 12MW of renewable power to its facilities, signaling an industry trend toward sustainable energy.

With its solar project, Teraco aims to address these issues by setting an example of self-sufficient, clean energy use, advancing South Africa’s renewable sector, and paving the way for future sustainability-focused data infrastructure.

Hikmatu Bilali