Teraco Secures $442 Million Loan to Expand AI-Driven Data Center

Teraco Data Environments Ltd., Africa’s leading data-center operator, has secured an 8 billion rand ($442 million) loan to finance a new facility designed to support the region’s rising demand for data-driven applications, particularly those powered by artificial intelligence (AI). The loan, syndicated by Absa Group Ltd., will allow Teraco to expand its data-center capacity to 228 megawatts, further solidifying its dominance in Africa’s rapidly growing digital infrastructure sector.
The new facility is being built to meet advanced hyperscaler standards and will include flexible liquid cooling systems to manage the high power and heat demands typical of AI deployments. “We are building the new facility to the latest hyperscaler specifications,” said Samuel Erwin, Teraco’s Chief Financial Officer, in an interview. “We are seeing demand for AI equipment that are power- and heat-intensive and expect this to grow.”

This latest financing effort, led by Absa with contributions from other major South African asset managers, follows Teraco’s 2023 funding round, in which it raised 11.8 billion rand to refinance debt and complete another facility, scheduled to go live in early 2025.
Africa’s data-center market, while still small in global terms, holds significant growth potential due to its young, tech-savvy population, which increasingly relies on internet services from banking to entertainment. Currently, Africa holds less than 2% of the world’s installed data-center capacity, with South Africa as the dominant hub. A recent report by Dai Magister projects that the African data-center market could grow to $7 billion within the next three years, creating opportunities for operators who can achieve scale and market relevance.
Teraco, acquired by Digital Realty Trust Inc. in a 2022 deal valued at $3.5 billion, remains the largest data-center operator on the continent, but faces increasing competition. Global players like Equinix and Amazon Web Services are expanding across Africa, while Microsoft recently announced a 1-gigawatt facility planned for Kenya in partnership with G42, a prominent AI firm from the United Arab Emirates.
With the new financing, Teraco is positioning itself to meet the growing demand for digital infrastructure in Africa, driven by the continent’s rapid technological adoption and potential as a future AI and cloud computing hub.