Internet service provider Liquid Telecom has raised Sh33.4 billion ($307 million) through a rights issue to fund a rapid expansion of its data centre business across Africa.
The rights issue included an additional Sh4.3 billion ($40 million) from UK development finance entity CDC Group Plc, the group said in a statement.
The fibre-network operator is planning to expand its data centre unit in five of the continent’s fastest growing economies including Egypt and Nigeria, said Stephane Duproz, Liquid’s Africa Data Centres head.
Last year, the firm handled massive upgrade of its network from Mombasa to Uganda and Rwandan borders.
Global technology giants are competing to establish affordable and efficient ways to extend high-speed internet and data storage across the continent, where demand is picking up as hundreds of millions of people start gaining access to web services.
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Although Africa’s data centre capacity has doubled in the past three years, it still accounts for less than one per cent of the global total, according to data from Xalam Analytics.
“Africa has untapped economic potential that is being unlocked by improving connectivity, data storage and the use of cloud-based applications,” said Liquid Telecom Chief Executive Nic Rudnick.
Amazon, Huawei Technologies and Microsoft Corporation have been among the firms investing in data centre capacity in African countries in recent years.
The markets are attracting buyout firms. Boston-based private equity firm Berkshire Partners acquired a stake in Teraco Data Environments, and Actis invested in Nigeria’s Rack Centre.
Liquid has bought land in Nigeria and Ghana and is scouting for locations in other major countries in Africa, Duproz said. It’s also acquiring a data centre from Standard Bank Group in South Africa, and building another nearby in Johannesburg.
“This will play an important role in addressing the increasing demand for digital services and help close the digital divide between Africa and other regions,” said CDC Chief Executive Nick O’Donohoe.
“Investing in Africa’s digital infrastructure is vital for building resilience within African economies and accelerating their growth.”
Additional reporting by Wainaina Wambu.