Nasdaq-listed Equinix will invest US$390-million (R7.5-billion) in Africa over the next five years building data centres and expanding current operations in South Africa and the west of the continent.
The California-based data centre operator is also pursuing opportunities in East Africa and will potentially spend more to build or acquire there, recently appointed MD for South Africa, Sandile Dube, said in an interview.
“We will continue to invest where it makes sense on the continent, and we are undergoing a number of studies to ascertain these opportunities,” Dube said. “The money planned for investment includes the construction of data centres at our current operations, but excludes plans for additional markets.”
Tech giants such as US-based Amazon.com, Microsoft and China’s Huawei Technologies have been investing in data centres in Africa in recent years as demand for connectivity and storage grows. The continent accounts for just 1% of global data centre capacity, creating a large opportunity for investors that want to tap into the region’s growth potential, while taking on certain operating risks such as an unreliable power supply.
Africa is home to a young and tech-savvy population with increasing access to the internet that is providing a boon for the industry, albeit from a low base. Equinix entered the continent two years ago with the $320-million acquisition of MainOne Cable Co and started building its first data centre in Johannesburg, South Africa, in 2023.
“We’re going to need key hubs on the continent as we have in Europe, which is why we have started with Lagos, Joburg and, in time, we would like to add Nairobi,” Dube said.
Read: Equinix firms up plans for R3-billion Joburg data centre
Equinix typically prefers acquisitions when entering a new market, although in certain cases such as South Africa it decided to build its own data centres, he said. — (c) 2024 Bloomberg LP