Africa’s Top Data Center Operator Invests $220 Million on Expansion

Loni Prinsloo (Bloomberg) -- Teraco Data Environments Pty Ltd. plans to invest 4 billion rand ($220 million) in Africa to meet rising demand for data as the continent’s governments battle the coronavirus.

The closely held business is expanding its Johannesburg facilities and starting construction on a new data center in Cape Town, Chief Financial Officer Jan Hnizdo said in e-mailed comments. The plans will be funded by shareholders including private-equity firms Berkshire Partners LLC and Permira Holdings LLP, while Teraco will draw down on a committed funding line from lender Absa Group Ltd., he said.

Africa’s biggest data center operator is investing to meet demand that Xalam Analytics estimates is growing up to three times faster than supply as internet access improves across the continent and businesses adopt cloud-based technology. The outbreak of Covid-19 is accelerating digital take-up, as companies switch to remote working and content streaming amid government lockdowns to contain the pandemic, Hnizdo said.

South Africa is viewed as a good base from which to service other parts of the continent, due to its infrastructure and skilled labor force. Microsoft Corp., Huawei Technologies Co. and Amazon.com Inc. have all recently built data centers in Cape Town or Johannesburg.

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