South African data centre provider Teraco has obtained an 8 billion rand ($442 million) syndicated loan from Absa and other financial institutions to support its upcoming data centre project and renewable energy initiatives, the company announced on Wednesday.
Teraco, a subsidiary of Digital Realty, revealed that the funding will also finance additional construction and a 120-megawatt utility-scale solar PV project as part of its energy generation strategy.
Samuel Erwin, Teraco’s CFO, highlighted the increasing global focus on energy supply due to advancements in generative AI, which has driven new investments in electricity production. “We have a unique opportunity in South Africa to integrate renewable energy generation into data centre infrastructure for our clients’ needs,” Erwin stated.
The demand for data centres, which house essential computing and data processing operations, has surged as companies incorporate generative AI and shift workloads to the cloud. South Africa, despite its history of power shortages, has become attractive to major cloud operators such as Microsoft, Amazon’s AWS, Huawei, and Oracle due to high internet adoption.
To address energy reliability, most data centre operators in the country develop independent power sources, and the government has pledged to fast-track renewable energy projects to bolster the grid.
The new 71,000 square metre facility, Teraco’s ninth, will be built to global hyperscale standards at its Isando Campus in Ekurhuleni, east of Johannesburg. The site, equipped with a 40 MW critical power load, is expected to be completed by 2026.
Jan Hnizdo, Teraco’s CEO, noted, “South Africa serves as a gateway for cloud services into Africa, positioning it as the technology and data centre hub for sub-Saharan Africa.”
