Teraco secures R2.5-billion in new funding round with Absa

Teraco Data Environments has concluded its biggest fundraising round to date, securing R2.5-billion from Absa and other lenders that will be used to build a giant new data centre east of Johannesburg.

The money will be go into the construction of Teraco’s new 38MW “hyperscale” data centre in Ekurhuleni. It will also use internally generated cash to finance construction.

Samuel Erwin, Teraco’s newly appointed chief operating officer, said the funding round also includes “several large institutions” that have joined the lending group. He declined to name them. Erwin previously worked at Absa.

“Absa has continued along the growth path with Teraco. Their understanding of our business model and funding requirements and ability to offer tailored funding solutions to suit our needs has contributed to Teraco’s success,” Erwin said in a statement on Tuesday.

TechCentral reported last November that Teraco had decided to break ground on a new, R4-billion data centre facility north of OR Tambo International Airport. The new data centre will be the biggest standalone data centre in Africa, with 16 000sq m of IT space, Teraco CEO Jan Hnizdo said in a telephonic interview at the time of the announcement.

Expansion

The multibillion-rand data centre, which will be located just off the R21 highway near the Serengeti Golf & Wildlife Estate, is being built to cater for expected future demand, especially from international technology companies looking for “hyperscale” cloud computing facilities to serve both the South African and sub-Saharan African markets.

The new facility is effectively an expansion of Teraco’s Bredell data centre further to the south, which is “pretty much sold out”. It is, however, much bigger than Bredell, which has 13MW of critical power load capacity.

At 38MW, the new site — known as JB4 — is only 1MW less than what’s available at the entire Isando campus, which is the site of Teraco’s initial data centre build in Gauteng. The Isando site has expanded significantly over the years from JB1 (which now consists of two buildings) to JB3. The Bredell site is known as JB2.

Teraco, whose main shareholders are Berkshire Partners and Permira Holdings, has raised just over R6-billion in debt financing to date. Erwin declined to comment on the terms of the debt and when repayments fall due.  — © 2021 NewsCentral Media