Teraco Data Environments, the largest data center company in Africa, has raised R11.8 billion ($841 million) in funds to support its expansion plans and upgrade its power infrastructure. According to the company's CFO, Samuel Erwin, nearly half of the loan financing, which was led by South African lender Absa Group, will be used to build out the company's solar capacity and construct new data centers. The rest will be used to refinance its current facilities in Johannesburg, Cape Town, and Durban.
To generate 50% of its power from clean energy sources by 2027 and 100% by 2035, Teraco will construct a 100 MW solar farm and install solar panels on the roofs of its data centers. This move aligns with the efforts of many of South Africa's largest businesses, which have been forced to generate their power due to the country's persistent power cuts. Teraco's expansion plans aim to almost double its data center capacity to nearly 200 MW in the next three to four years.
Teraco's data center expansion is part of a larger effort to meet the growing demand for internet and cloud services in Africa, which currently accounts for only 1% of the world's data center capacity despite having a rapidly growing population. Teraco remains the largest data center operator in Africa, with new players such as Equinix and Amazon Web Services also looking to expand in the region. The company was valued at around $3.5 billion following a majority stake purchase by San Francisco-based Digital Realty Trust Inc. last year.
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