Nasdaq-listed Equinix plans to invest $390 million in Africa over the next five years, building data centers in South Africa and the west of the continent and expanding its current operations.
The California-based data center operator is also pursuing opportunities in East Africa, with the possibility of spending more money on construction and acquisitions there, according to the recently appointed managing director for South Africa. Sandile Dube said in an interview.
“We will continue to invest where it makes sense on the continent and we are doing a lot of research to identify these opportunities,” Dube said. “The funds we intend to invest include the construction of data centers in our current operations, but do not include plans for additional markets.”
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Tech giants such as Amazon.com Inc., Microsoft Corp. and China's Huawei Technologies Co. have invested in data centers in Africa in recent years as demand for connectivity and storage grows. The continent accounts for just 1% of the world's data center capacity, presenting a huge opportunity for investors who want to take advantage of the region's growth potential while taking on certain operational risks, such as unreliable power supplies. It has become.
Africa is home to a young, tech-savvy population with increasing access to the internet, benefiting the industry, albeit from a low base. Equinix expanded to the continent two years ago with the acquisition of MainOne Cable Co. for $320 million, and will begin building its first data center in Johannesburg, South Africa in 2023.
“Like Europe, we're going to need a significant hub on the continent, so we're hoping to start with Lagos, Joburg and then add Nairobi over time,” Dube said.
Equinix typically prefers acquisitions when entering new markets, but in certain cases, such as South Africa, it has decided to build its own data centers, he said.
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