Jan Hnizdo

Teraco Data Environments plans to invest R4-billion in Africa to meet rising demand for data as the continent’s governments battle the coronavirus.

The closely held business is expanding its Johannesburg facilities and starting construction on a new data centre in Cape Town, CEO Jan Hnizdo said in e-mailed comments.

The plans will be funded by shareholders including private equity firms Berkshire Partners and Permira Holdings, while Teraco will draw down on a committed funding line from lender Absa Group, he said.

Africa’s biggest data centre operator is investing to meet demand that Xalam Analytics estimates is growing up to three times faster than supply as Internet access improves across the continent and businesses adopt cloud-based technology. The outbreak of Covid-19 is accelerating digital take-up, as companies switch to remote working and content streaming amid government lockdowns to contain the pandemic, Hnizdo said.

South Africa is viewed as a good base from which to service other parts of the continent, due to its infrastructure and skilled labour force. Microsoft, Huawei Technologies and Amazon.com have all recently built data centres in Cape Town or Johannesburg.  — (c) 2020 Bloomberg LP