US gives $30m to expand Nairobi-based regional data centre

Friday January 20 2023
UK High Commissioner to Kenya Jane Marriott with US ambassador to Kenya Meg Whitman

UK High Commissioner to Kenya Jane Marriott (left) with US ambassador to Kenya Meg Whitman during the official ground breaking for an additional data centre facility by Africa Data Centres in Nairobi on January 19, 2023. PHOTO | DIANA NGILA | NMG


The United States international investment agency has injected $30 million into Africa Data Centres (ADC) to expand its storage facilities in Nairobi that provide digital data storage services to businesses across the east, central and southern Africa region.

This is in addition to a $83 million funding dispersed to the company last year as part of the $300 million commitment announced by the US International Development Finance Corporation (DFC) in 2021 to help the company expand its operations on the continent.

With this additional investment, the company, which operates the region’s largest data centre, kicked off the construction of an additional facility that will more than triple its current capacity to 15 megawatts (MW), a project expected to end by mid-next year.

ADC’s chief executive Tesh Durvasula told The EastAfrican that the demand for their services is growing and they won’t be able to sustain it with the current 4.5MW capacity which is rapidly getting exhausted, necessitating the expansion.

 “Our customers are mainly the Africa 500, which are the continent’s largest companies across financial services, healthcare, government, and information, communication, and technology sectors,” Mr Durvasula said.

“Eventually we will be able to expand to 20 or 25MW capacity if we witness a continued growth in demand. The expansion will enable Africa Data Centres clients to grow and scale depending on their requirements.”


Lease storage space

Data centres – dedicated facilities to house telecommunications and storage systems – have become essential to businesses that handle large data as the digital migration drives companies online. The centres lease storage space for backup and safekeeping of data to firms.

Speaking at the ground-breaking ceremony in Nairobi Thursday, Hardy Pemhiwa, the chief executive of ADC’s parent company, Cassava Technologies, said they believe data centre will have a crucial role in the continent’s digital transformation and economic growth.

“Without them, the push towards a digital economy in Africa will be missing a key pillar. Our decision to increase our investment in our data centres in Kenya is in recognition of the position the country now occupies as a leader in the adoption of digital technologies in Africa,” he said.

While announcing the additional investment, US ambassador to Kenya Meg Whitman said such projects “are at the centre of Kenya and Africa’s tech transformation,” adding that ADC’s data centre offers “digital security to many leading US and international internet-based companies.”

“Despite being home to roughly 17 percent of the world’s population, Africa accounts for less than one percent of available global data centres.

“Bridging this gap is estimated to mean an annual investment of $4 – $7 billion. Investments like the US’s [are] helping to bridge that gap.”

Leading Africa tech hub

Ms Whitman reaffirmed her country’s commitment “to seeing Kenya succeed in its tech transformation. From individual success stories to expanding open, interoperable, reliable and secure internet to cement Kenya’s role as the leading tech hub on the continent”.

speaking at the same event, United Kingdom’s High Commissioner to Kenya Jane Mariott said investing in projects such as the ADC’s is crucial “in supporting the growth of global technology”.

The UK, through its development finance agency – the British International Investment – has injected $220 million into ADC and its sister company Liquid Telecoms in the last four years, part of which was crucial in constructing the first phase of the data centre.