Kenya attracts data centre investors as demand grows

Investors in the data service hope to tap the lucrative Kenyan market as demand for cloud services increases with the entry of multinationals.

Nairobi is now rivals Cape Town and Lagos for Africa’s booming data centre market which continues to attract heavy investment as internet usage continues to grow especially with the coming of the bandwidth heavy metaverse.

Africa Data Centres managing director Dan Kwach says East Africa is one of the firm’s key markets as there is a huge­ demand for data centres in the region.

He says that the demand for digital technologies has accelerated as businesses of every type and size in Africa expedite their digital transformation journeys.

“We are building this bigger or hyperscale data centre capacity as big tech firms look to invest in the region and they will require reliable and fast services,” Kwach said.

Already Google is looking to create an African tech hub in Nairobi, Amazon has also made an announcement on creating a local availability zone.

Microsoft, Alibaba and Oracle are also exploring the opportunities of setting base in the region.

The new development has attracted investments from different players with ADC now eyeing to grow its data centre capacity by up to 20MW of IT load in the next five years.

Kwach said the new facility aims to pave way for Africa Data Centres hyper-scale customers to deploy technology solutions to the region in low latency.

The firm is investing Sh24.4 billion in three expansion projects earmarked for East Africa as it highlights the tremendous growth opportunity it sees in Kenya and the continent as a whole.

The latest entrants in the data centre business is the Masinga Data Center which is being set up by US-based software solutions company Cloudoon Inc, located in Delaware which has also injected about Sh6 billion in the project.

Experts say the boom in the sector is partly driven by advances in connectivity and data consumption, particularly as smartphone penetration rises in Kenya.

The Middle East and Africa, is projected to be the fastest growing region in terms of internet user numbers in the years ahead.

The region will also lead in the growth of devices and connections per capita.

Data centres have in the recent past been the new hot investments among the deep pocketed corporations with the latest investors being Mwalimu Sacco, Safaricom data centre to be located in Thika, Icolo data centre in Mombasa and Nairobi, Dimension data, MTN data center and Nairobi data center.

However, Kwach says that rather than this becoming a competition for business, it will ease the pressure in the market to meet the supply.

Currently Africa accounts for less than one per cent of the world’s co-location data centre supply, with South Africa accounting for the bulk of the continent’s capacity.