How renewable energy and innovation are making Africa a leader in sustainable, AI-ready data infrastructure.
Market Growth and Demand
The African data center industry is expected to expand at a 12% compound annual growth rate (CAGR) from 2023 through 2028. Over the same period, the value of the data center market on the continent is expected to hit $10 billion. Factors behind this growth include increased enterprise cloud adoption, more internet penetration, and the rapid expansion of artificial intelligence (AI) driven services.
Despite this expansion, less than 1% of the total data center capacity is located in Africa. This is a significant gap that needs urgent solutions if Africa’s growing digital needs are to be met. Today, leading telecom operators, cloud providers, and investors are doing much to bridge this deficiency in infrastructure by investing heavily in green energy sources and hyper-scale, edge data centers.
Data centers are heavy consumers of power, and, therefore, a reliable power supply is critical to their efficient operation. For many African countries, this is a major challenge as they face frequent power outages and have unreliable national grids. Together with Environmental, Social, and Governance (ESG) sustainable energy solutions requirements, this means that African countries that want to attract investors in the data center sector must also ensure that they create an enabling regulatory environment that facilitates the process.
To reduce dependence on fossil fuels and tackle power shortages, several African countries are embracing renewable sources of energy more. A good example of ongoing initiatives in Africa is the Turkana (Kenya) wind power plant. This will probably be the world’s largest wind power plant. This transition to renewable energy will foster economic growth and, critically, address energy challenges to remote communities in the northern part of Kenya through innovative off-grid solutions.
A. Challenges to a Renewable Future
Building sustainable data centers makes good business sense, enhances operational efficiency, and most importantly, it also meets ESG best practices and is part of responsible corporate citizenship. However, despite recent increases in Sub-Saharan African data center infrastructure investments, the bulk of Africa’s storage capacity is found in South Africa, at about 408MW. With 140MW, Nigeria follows, just ahead of Egypt with 118MW. However, other countries are also making big strides with Kenya having 79MW and Morocco 65MW.
Factors responsible for this slow data infrastructure growth include infrastructure limitations, weak legal frameworks, sluggish local and foreign funding, as well as a general lack of appreciation for the potential benefits of data centers.
1. Infrastructure Limitations
In many regions of Africa, insufficient or outdated grid infrastructure is a major hindrance to the integration of sustainable renewable energy projects. It’s crucial to have investments that go toward modernizing existing transmission networks to ensure that the newly generated renewable energy reaches consumers easily and reliably.
2. Regulatory Complexity
The diverse, uncoordinated regulatory, and legal landscapes across different African countries create potential hurdles for global investors. Variations in compliance requirements, different local laws, and entry permitting processes necessitate that investors have specialized expertise if they are to navigate effectively.
3. Funding and Investment Barriers
Modern renewable projects require substantial investment through innovative financing models that can help overcome the initial high capital costs. Although the energy sector in Africa is already receiving significant funding flows, securing the right financial instruments remains a challenge, making investment ventures risky.
4. Capacity and Skills Gaps
Artificial intelligence, fintech, ecommerce, and cloud computing adoption are booming across Africa. This has triggered a huge transition into renewable energy to meet the rising power demand of data centers. The renewable energy projects’ rapid expansion also comes with rising demand for a highly skilled workforce. To maximize the potential, African countries must invest in technical training and local capacity building if they are to sustain long-term innovation and growth in the sector.
B. Why Africa Can’t Copy-Paste Data Centers
As a whole, in 2025, Africa will have 223 data centers spread across 38 countries. South Africa leads the top three in Africa with 56 facilities, Kenya follows with 19, and Nigeria has 17. By 2029, the data center market in Africa, projected to reach $9.15 billion in value, which presents the continent with an opportunity to achieve both digital self-determination and economic growth. However, for this to happen, national governments must move beyond their fragmented approaches and start following more coordinated regional and continental strategies.
In Africa, the significance of data centers goes beyond simple commercial growth. These are strategic facilities essential to economic resilience, digital sovereignty, and cybersecurity. Local data centers ensure that African governments and businesses manage and retain control over their data while at the same time enhancing digital inclusion on the continent.
In an increasingly data-driven world, data centers form the bedrock upon which digital infrastructure is built. These facilities support everything from AI and cloud computing to critical government services and financial transactions. In Africa, however, some challenges including high energy costs and unreliable power grids must be resolved if the continent is to have a robust data center ecosystem.
Africa, however, can’t simply “copy-paste” what other regions did when creating their data center infrastructure. Africa’s challenges are unique and include, among others, unreliable power grids and fragmented data localization laws. This calls for localized solutions that are also energy efficient. In particular, Africa must create and design efficient, and energy-sustainable green data centers.
C. African Green Data Centers
As the data center sector on the continent grows, it becomes more important to adopt sustainable strategies if Africa is to overcome infrastructure and energy challenges, thus ensuring long-term industry viability. By implementing more renewable energy initiatives, data centers in Africa can minimize their environmental impact and meet the rising digital services.
Older data centers generally consume more energy in their electrical and cooling systems. New data centers in Africa are embracing sustainable and more energy-efficient systems designed to significantly reduce power consumption.
With its abundant wind and sunshine resources, Africa is well-positioned to capitalize on sustainable and renewable energy for its data centers. The continent, by investing in wind turbines and solar farms, can ensure data centers have a reliable power supply while contributing to the global ESG goals.
Case Study 1: Teraco (South Africa)
Teraco, South Africa, wants to end it dependency on fossil fuel power by 2035. Teraco, which is also South Africa’s largest data center company, has eight data centers currently with a 185MW power load capacity across Cape Town, Durban, and Johannesburg.
Already, Teraco has installed 6MW of rooftop solar, which by 2026 will expand to 10MW. In addition, the company will purchase 120MW of privately generated power from a Free State-based solar plant, which becomes operational in 2026. With these, the South African company hopes to have 50% of its power coming from clean energy sources by 2027.
Additionally, the data center company signed an agreement with NOA, an integrated energy aggregator, to purchase solar power deemed essential to support operations when solar production is low. In ten years, Teraco aims to power all its operations from renewable sources.
Case Study 2: Raxio Group
Raxio Group is Africa’s leading Tier III data center platform. Founded in 2018, the carrier-neutral data operator offers best-in-class IT infrastructure, fiber, and cross-connect internet services. The carrier-grade facilities at Raxio Group are an important component of Africa’s digital economy, offering sustainable, secure, and scalable solutions for network operators, enterprises, and cloud providers.
Raxio Group has signed a financing agreement with the International Finance Corporation (IFC) worth $100 million. The debt funding from this World Group member will accelerate the expansion of facilities at Raxio, powering key technologies such as cloud computing, artificial intelligence, and digital financial services, which are critical enablers of digital inclusion and economic growth in Africa.
With the IFC funding, Raxio is looking to expand and serve underserved parts of the continent and is seeking to open regional data center platforms in Angola, Tanzania, Ethiopia, the Democratic Republic of Congo, Mozambique, and Côte d’Ivoire.
Case Study 3: Wingu Africa (Djibouti)
With strategic locations in Djibouti, Tanzania, and Ethiopia, Wingu Africa is the first carrier-neutral data center operator in East Africa. Wingu Africa recently inaugurated the TO7 Technology Park in Djibouti, a transformative project that reinforces the country’s position as a key player in the region’s digital economy.
The TO7 Technology Park hosts a modern Tier 3 Carrier-Neutral Data Center, a state-of-the-art Cable Landing Station that facilitates international high-speed data transfers, and an Innovation Center that promotes local entrepreneurship and tech talent. The Park is set to play an important role in Djibouti’s digital revolution by attracting more investment, with long-term benefits expected in sectors such as healthcare, education, and business.
With 99.982% uptime, the Tier 3 Carrier supports critical government services and businesses with unmatched reliability. The Wingu’s Cable Landing Station seeks to strengthen Djibouti’s position as a strategic telecommunication hub that links Africa, Asia, the Middle East, and Europe. The TO7 Technology Park comes with cutting-edge technology and convenient collaborative workspaces.
E. The African Edge: Distributed & Small-Scale Data Center Solutions
For Africa to experience a digital transformation, unlock its economic potential, enhance operational efficiency, and also join the AI race, robust and sustainable data centers are essential. To operate, data centers need plenty of reliable power. On the flip side, stable demand from players like data centers will help improve the power systems on the continent. Africa’s choice is clear: either build and invest in the necessary infrastructure required to power modern power data centers and emerging AI systems or sit and watch the future take root elsewhere.
Across Africa, edge data centers are expanding rapidly to address the perennial challenges that face the continent. Efforts in this regard include updating infrastructure, improving coverage, reducing content latency, and increasing rollout agility. Small-scale and distributed data center solutions, often known as “micro” or “edge” data centers, are increasingly becoming crucial in Africa as the region seeks to address its unique challenges and exploit opportunities that come with digital transformation. Smaller in size, edge data centers are crucial for local data processing as they reduce latency and provide better connectivity, vital aspects in today’s digital landscape.
In Kenya, Nigeria, Egypt, and Morocco, new data center hubs are emerging. To serve markets that lack large-scale infrastructure, some African countries are developing smaller, micro “Tier 2” edge caching data centers. These facilities are designed for localized storage and are more cost-effective and efficient when it comes to meeting growing data processing power demand, particularly in locations with limited infrastructure.
Case Study: Nigeria’s MDXi
In Nigeria, MDXi and AMS-IX have collaborated to launch Internet Exchange, a new Internet exchange in Lagos. AMS-IX is one of the world’s largest Internet Exchange operators, while MDXi is an Equinix company. Under the partnership terms, MDXi operates as the AMS-IX’s commercial partner, as well as the marketing and regional sales arm for AMS-IX Lagos.
AMS-IX Lagos seeks to become an important content hub in Nigeria and West Africa, enabling regional Internet exchanges, carriers, and ISPs to aggregate content sourced from international hosting companies, Content Delivery Networks, and application providers. MDXi and AMS-IX are also working to build alliances with locally based telecom operators. MDXi’s connected application providers include Google, Microsoft, and Cloudflare.
F. Opportunities in Renewable Energy
Africa is on the verge of a digital revolution propelled by surging demand for cloud and AI services, connectivity, and robust data infrastructure. As Africa embraces green digital transformation, investing in digital infrastructure offers an unmatched opportunity that can unlock new markets, bridge the connectivity gap, and fuel economic growth. Governments across the continent, in collaboration with global tech companies and private entities are investing in wind and solar energy to create a more diverse and resilient energy landscape.
Africa’s Competitive Advantage
Countries like Kenya are already generating over 90% of their electricity requirements from green power (renewables), which presents the continent with a unique opportunity to lead the green data centers transformation. Others like Egypt and South Africa are leading in wind, solar, and geothermal power. More investments in hydro-powered, wind, and solar facilities could position the continent as a global leader in sustainable cloud computing.
Collaboration to Bridge the Skills Gap
To tackle the challenge of the skills gap, industry leaders highlight the importance of more public-private collaboration. Initiatives between tech companies, governments, and academic institutions may be instrumental in building a strong pipeline of local talent.
G. Conclusion
Leveraging its tech-savvy young population and abundant renewable energy resources, Africa is on the verge of a green technology revolution. Driven by groundbreaking technologies, favorable market forces, and supportive government policies, Africa’s renewable energy landscape is rapidly evolving. While challenges remain, the dream of Africa’s green tech revolution is still valid. Africa has vast green resources capable of transforming the energy sector.
As Africa increasingly embraces AI-powered technologies, it will be essential to have high-performance, reliable computing infrastructure. Already, Africa is benefitting from funding and investments in AI-ready, green-powered data centers. This will support everything ranging from fintech and business to predictive analytics in agriculture and machine learning applications in healthcare. But the choices made now by governments and other key stakeholders will determine whether this transformation takes place or if Africa is left behind with its dependency on other pace setters.
Expanding Africa’s digital infrastructure goes beyond storage and bandwidth growth. It touches on deeper questions about taking initiatives, accountability, control, and perceived long-term economic value. For Africa, the road ahead requires supportive policies, strategic investments, and collaborative efforts if the full potential of green technologies is to be realized and the continent set on a path of sustainable transition.
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Written by : Sammy Mwatha, Expert Author
Sammy Mwatha is a skilled content writer who blends business, tech, health, and lifestyle topics with analytical, story-driven insights.
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