Raxio Opens Mozambique Data Center in $290M Africa Push

(Bloomberg) -- Raxio Group, a data center company backed by global investor Meridiam Infrastructure Partners SAS and US private equity firm Roha Group, is opening its first facility in Mozambique as part of its $290 million investment strategy in Africa.

“Our base business plan includes a portfolio of 10 data center facilities, and the funding package we have in place now with the debt and equity covers that,” Chief Executive Officer Robert Mullins said in an interview. “This year we are opening five new facilities across as many African markets.”

Tech giants such as US-based Microsoft Corporation and China’s Huawei Technologies Company have been investing in data centers on the continent in recent years as demand for better connectivity, artificial intelligence capability and storage increases. 

Africa is home to a young and tech-savvy population that needs more access to the internet as they turn to smart-phones for services ranging from banking to entertainment. The region accounts for just 1% of global data center capacity, creating a large opportunity for investors interested in tapping into the region’s growth potential, despite operational risks such as a reliable power supply.  

Microsoft this month announced that would join forces with the United Arab Emirates’ G42 to build out a $1 billion geothermal-powered data center in Kenya, while Alphabet Inc.’s Google said it planned to build another undersea cable to connect the continent to Australia. 

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Raxio has attracted over $120 million in equity from its shareholders, and secured a debt package of $110 million from France’s Proparco and UK-backed Emerging Africa Infrastructure Fund, Mullins said. The firm is also in talks with third parties to top up its debt facilities with at least another $60 million, as it pushes ahead with its data center build-out.  

The company earmarks funds for markets that are under-served and prioritizes countries with larger populations. It also follows the trail of undersea cables for coastal markets, including Angola, Ivory Coast, and Tanzania. 

With the expansion into Mozambique, Raxio now covers seven African markets, with the total expansion capacity of 33 megawatts in those countries, Mullins said. 

“What we set out to do is to build facilities to cater for local needs, but also be able to host the likes of Microsoft or an AWS or a Google or a Meta in any country,” he said.