South Africa’s Teraco secures $442 mln syndicated loan for new data centre

CAPE TOWN, Nov 13 (Reuters) – South African data centre operator Teraco has secured a 8 billion rand ($442 million) syndicated loan from Absa and other financial institutions for a new data centre and renewable energy projects, the company said on Wednesday.

Teraco, owned by Digital Realty, said the loan would also be used to finance other construction projects and its renewable energy generation programme, which includes a 120 megawatts utility-scale solar PV generation plant.

“Recent developments in generative AI have placed a spotlight on global energy supply constraints and triggered a new wave of investment into electricity generation,” Samuel Erwin, chief financial officer at Teraco said.

“We have a unique opportunity in South Africa to integrate renewable energy generation into the provision of data centre infrastructure to serve the needs of our clients.”

The market for data centres, or physical spaces housing computers and processing data, has grown rapidly as companies incorporate generative AI in their products and migrate their workloads to the cloud.

South Africa has already attracted big global cloud operators such as Microsoft, Amazon’s AWS, Huawei and Oracle.

With internet connectivity and adoption much higher than in most countries on the continent, companies have been willing to overlook its history of crippling blackouts to invest in data centres there.

Most data centre operators build them with their own power supplies. South Africa has also vowed to accelerate renewable energy projects to support the ailing grid.

The 71,000 square metre data centre is Teraco’s ninth data centre development and is being built in line with global hyperscale requirements, the company said.

The new data centre has 40 MW of critical power load and is being built at its Isando Campus in Ekurhuleni, east of Johannesburg. It is scheduled for completion in 2026, the company said.

“South Africa is a springboard for cloud provision into Africa and, as a result, has become the technology and data centre hub for sub-Saharan Africa,” Jan Hnizdo, the chief executive at Teraco, said. ($1 = 18.1143 rand) (Reporting by Nqobile Dludla; Editing by Alison Williams)

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