Pan-African data centre developer and operator Raxio Group has secured a $33-million sustainability-linked debt facility commitment from the Emerging Africa Infrastructure Fund (EAIF), which will enable the design, construction, operation and management of a series of high-impact data centres in seven countries across sub-Saharan Africa.
The EAIF is acting as co-arranger on the transaction alongside Proparco, with whom it will mobilise a $110-million debt package to Raxio to further develop digital infrastructure in response to the urgent demand for affordable Internet connectivity in the region, Raxio said.
The new Tier III data centres in Angola, Côte d’Ivoire, the Democratic Republic of Congo, Ethiopia, Mozambique, Tanzania and Uganda will be some of the first-ever independent, enterprise-standard data centres in these countries. The centres will provide up to 11 MW of additional processing power, delivering high-grade colocation and information technology infrastructure services.
The investment marks a significant step towards supporting connectivity and innovation and stimulates the growth of digital economies in nascent data centre markets, fostering an enabling environment for fast-growth businesses to operate and access new markets.
About 1 200 jobs will be created during the construction phase, with an additional 120 jobs anticipated post-construction. After the initial roll-out, EAIF and Raxio will target expansion into further African markets.
“Raxio is committed to building a digital Africa, and this financing gives us the runway we need to continue executing our strategy," said Raxio Data Centres CEO Robert Mullins.
Africa's data centre market is among the fastest growing in the world and is a key pillar of the continent's burgeoning digital economy, which is expected to grow to $180-billion by 2025 and $712-billion by 2050.
The investments made by the EAIF, as a Private Infrastructure Development Group (PIDG) company, will ensure this growth is sustainable and inclusive for African communities and businesses, in line with the PIDG's ambition to achieve the United Nations' Sustainable Development Goal on Industry Innovation and Infrastructure (SDG 9).
Further, local neutral-carrier data centres have a multiplier effect on domestic economies and are integral to the growth of a vibrant digital ecosystem. These centres will help improve connection speeds, enhance user experience and reduce transit costs for Internet service providers, enabling them to offer affordable tariffs for end consumers.
The EAIF’s commitment expands the ease of access to the digital economy for all segments of society and modern businesses, enhancing productivity and developing critical skills in secondary markets that are often overlooked.
“Data centres in Africa enable the growth of the continent's digital economy and unlock innovation for digitally native communities and businesses, providing more affordable access to transformative technologies and services,” said JSE- and LSE-listed asset management company NinetyOne investment director and EAIF fund manager Sumit Kanodia.
“Our partnership with Raxio signifies a joint ambition to narrow the digital divide in several high-potential economies by filling a vital funding gap,” he said.
To date, the EAIF's digital communications infrastructure investment portfolio represents over $124-million of its total portfolio of $1.14-billion. The fund's risk appetite, structuring expertise and ability to attract capital that would not otherwise flow to critical digital infrastructure projects in sub-Saharan Africa provide a model for other investors seeking to create market-shaping impact in frontier and developing economies.