Africa Data Center Construction Market - Industry Outlook & Forecast 2024-2029

Africa Data Center Construction Market - Industry Outlook & Forecast 2024-2029

The Africa data center construction market by investment is expected to grow at a CAGR of 13.08% from 2023 to 2029.

KEY HIGHLIGHTS

• In 2023, South Africa, Kenya, Nigeria, Egypt, Ethiopia, Morocco, Ghana, Algeria, and many others had an average internet penetration higher than 64%.
• The African government's support of digitalization and tax incentives in the region will improve the development of data centers and propel the growth of the Africa data center construction market. In South Africa and Kenya, the government has partnered with private entities to develop digital infrastructure, which increases the demand for data centers.
• 5G connectivity has been growing significantly in the market, and the network is available in over 18 countries, such as South Africa, Nigeria, Ethiopia, Gabon, Senegal, Egypt, Botswana, Zimbabwe, Madagascar, Uganda, Kenya, Lesotho, Seychelles, Mauritius, and others. The growing 5G environment will drive the requirement for establishing edge data centers in tier 2 & tier 3 locations for low latency and access to data at farther locations.
• Cloud-based services in the African region have been growing over the past years, with South Africa, Kenya, and Nigeria being the countries where most cloud deployments occur. For instance, in October 2023, Huawei planned to spend USD 430 million in the next five years to develop cloud computing infrastructure, support local software providers, and train digital professionals in Northern Africa.
• The industrial land for the development of data centers in the region has been growing over the years, with governments across several countries establishing special economic zones or free trade zones offering different types of support for development. For instance, the Kenya government has established several special economic zones, such as Greater Mombasa SEZ, Lamu SEZ, Dongo Kundu SEZ, Naivasha Industrial Park, and Kisumu SEZ.
• In Africa, data center providers use renewable energy to power data centers for sustainable data center operations. South Africa, Nigeria, Kenya, Egypt, Morocco, Ethiopia, and the Ivory Coast have witnessed renewable energy deployments. For instance, in February 2024, Teraco (Digital Realty) planned to develop a utility-scale solar PV energy facility in South Africa with a power capacity of around 120 MW.

MARKETS TRENDS

Increasing Deployment of 5G Network Services

• Innovations in technology and deployment increase the demand for 5G in Africa. The deployment of 5G positively affects the demand for data centers and supports the growth of the Africa data center construction market. The increased data traffic, submarine cable connectivity, and smart cities’ development have driven data center construction in the region with the increase in 5G applications.
• Telecom operators, such as MTN, Vodacom, Ethio Telecom Mascom, and Rain, have enabled 5G technology in some African countries on a trial basis and will launch commercial 5G services nationwide.
• African governments have taken the initiative to develop 5G in Africa. For instance, in July 2023, Ethio Telecom announced that it would expand the 5G network and service quality in Ethiopia to meet the demand of end users.

Growing Adoption of Renewable Energy

• Africa has a power outage, and governments across several countries have taken initiatives to strengthen power availability, such as increasing investments in renewable energy resources.
• In October 2023, the public investment corporation (PIC) of South Africa planned to invest USD 11.27 trillion in renewable energy projects to generate 200MW of electricity.
• In March 2023, Africa Data Centres and Distributed Power Africa signed a 20-year-long PPA for a 12 MW solar energy supply.
• In 2022, Eskom’s 1,600-hectare land will be provided to the renewable energy company Mainstream Renewable Power as part of a lease agreement for the construction of facilities for the generation of renewable energy in Africa.
• The South African government implemented a carbon emission law that mandates the emitter to pay principles for significant emissions and should be offered incentives for adopting greener technology.
• The Nigerian government promotes clean energy technologies for sustainable start-ups and small and medium enterprises (SMEs). This move aims to address the country's environmental challenges by adopting the Global Clean Technology Innovation Program (GCIP)
• Egypt expects to increase the share of total electricity produced from renewable sources to 20% and 42%, respectively, by 2022 and 2035.

SEGMENTATION INSIGHTS

• In the African region, most Tier III facilities, UPS systems, are adopted as N+1 redundant systems, while other facilities have installations of N+N UPS systems.
• In 2023, most data centers in Africa were built with a power capacity of more than 15 MW. The construction of mega data center facilities will aid in power capacity growth across African data centers.
• The construction of data centers involves the participation of various parties, such as construction contractors, architectural and design firms, infrastructure providers, installation & commissioning service providers, and data center operators.
• The majority of the data centers in the African region are built based on ASHRAE guidelines. To increase the cooling infrastructure's efficiency, data centers give prime importance to PUE (Power Usage Effectiveness), WUE (Water Use Effectiveness), and Carbon Usage Effectiveness.

The report includes the investment in the following areas:

Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• PDUs
• Other Electrical Infrastructure

Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Cooling Systems

• CRAC and CRAH Units
• Chillers Units
• Cooling Towers, Condensers, & Dry Coolers
• Other Cooling Units

Cooling Technique

• Air-based Cooling
• Liquid-based Cooling

General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Tier Standards

• Tier I & Tier II
• Tier III
• Tier IV

GEOGRAPHICAL ANALYSIS

South Africa has significant investments in hyperscale and cloud data centers. Hyperscale operators, such as Amazon Web Services (AWS), Google Cloud Platform (GCP), Huawei Cloud, Oracle Cloud, and Microsoft Azure, have led the market regarding hyperscale investment and innovative technologies. The development of smart cities, special economic zones, free trade zones, government incentives, and exemptions fuels the growth of the Africa data center construction market. South Africa, Kenya, Morocco, Nigeria, Egypt, Ethiopia, and Ghana have been at the forefront of this development, as they have actively invested in smart city initiatives. For instance, in May 2023, the government of Kenya signed a memorandum of understanding with the Korean government to develop a Smart City in Kenya. Further, in 2023, South Africa, Nigeria, Egypt, Morocco, and Kenya were among the top countries with the highest colocation and hyperscale operator investments, and the trend is expected to continue.

Geography

• Africa
• South Africa
• Kenya
• Nigeria
• Egypt
• Ethiopia
• Other African Countries

VENDOR ANALYSIS

Prominent Data Center Support Infrastructure Providers

• 4energy
• ABB
• Caterpillar
• Cummins
• Delta Electronics
• EATON
• EVAPCO
• Enlogic
• Legrand
• Master Power Technologies
• Rittal
• Rolls-Royce
• Schneider Electric
• Siemens
• STULZ
• Vertiv

Prominent Data Center Construction Contractors

• Abbeydale
• Advanced Vision Morocco
• ARSMAGNA
• Arup
• AtkinsRéalis
• b2 Architects
• CAP DC
• Chess Enterprises
• Copy Cat Group
• Eastra Solutions
• Edarat Group
• EDS Engineers
• Egypro
• H&MV Engineering
• Ingenium
• Interkel
• JLB Architects
• MWK Engineering
• Orascom Construction
• REDCON Construction
• Raya Network Services
• Royal HaskoningDHV
• Shaker Group
• Sterling & Wilson
• Summit Technology Solutions
• Tri-Star Construction
• United For Technology Solutions
• Westwood Management

Data Center Investors

• 21st Century Technologies
• Africa Data Centres
• Airtel Africa
• Digital Parks Africa
• Digital Realty
• Equinix
• Galaxy Backbone
• IXAFRICA DATA CENTRE
• Medallion Communications
• NTT DATA
• Open Access Data Centres
• Paratus Namibia
• Rack Centre
• Raxio Data Centres
• Raya Data Center
• Telecom Egypt
• Vantage Data Centers
• Wingu.Africa

New Entrants

• Cloudoon
• Kasi Cloud
• Gulf Data Hub
• Khazna Data Centers

KEY QUESTIONS ANSWERED:

1. What is the growth rate of the Africa data center construction market?

2. How big is the Africa data center construction market?

3. What is the estimated market size in terms of area in the Africa data center construction market by 2029?

4. How many MW of power capacity is expected to reach the Africa data center construction market by 2029?

5. What are the key trends in the Africa data center construction market?