(Ecofin Agency) - Africa is facing a growing demand for digital infrastructure, fueled by rapid expansion in digital services and interconnectivity needs. Access to robust data center infrastructure is essential for digital transformation, and investments in such facilities empower African enterprises to adopt digital solutions.

South African data centre operator Teraco, a subsidiary of Digital Realty, announced on November 13 that it has started construction on a new 40MW hyperscale data centre at its Isando Campus in Ekurhuleni, east of Johannesburg. Funded by a recently secured R8 billion ($437.2 million) syndicated loan, the facility, known as JB7, is scheduled for completion in 2026 and will enhance Teraco’s capacity to meet the growing demand for data services across Africa.

“South Africa is a springboard for cloud provision into Africa and has become the technology and data centre hub for sub-Saharan Africa,” said Teraco CEO Jan Hnizdo.

JB7 will mark Teraco’s ninth data centre in South Africa, expanding its platform to support clients seeking secure, scalable, and environmentally friendly solutions. It will bring Teraco’s total critical power load at Isando to 110MW, making it a leading hub for high-density cloud and artificial intelligence (AI) deployments.

The financing, led by Absa and supported by multiple financial institutions, will cover the JB7 development and bolster Teraco’s renewable energy initiatives, including a 120MW solar PV plant connected to the Eskom grid. Part of Teraco’s commitment to Environmental, Social, and Governance (ESG) goals, the solar project aims to enhance the sustainability of its operations as demand for data services continues to grow.

According to Research and Markets, the data center colocation market in South Africa was valued at 330 million USD in 2023 and is expected to reach 780 million USD by 2029, at a CAGR of 15.42%. Teraco is preparing its infrastructure to take advantage of these forecasts.

Hikmatu Bilali