SMEs and Ventures

Digital Realty is expanding across Africa

Digital Realty, the global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions and Pembani Remgro Infrastructure Fund have announced the formation of a joint venture to acquire Medallion Data Centres, Nigeria’s  colocation and interconnection provider.

Medallion operates two data centers, one in Lagos, the most populous urban metropolitan area in Africa with approximately 15 million people, and one in Abuja, the capital of Nigeria.  Medallion’s Lagos data center is the leading connectivity hub in Western Africa with over 70 carriers and internet service providers, over 80% of the public peering traffic on the Nigerian Internet Exchange, and a peering point for all subsea cables currently operating in Nigeria with plans to serve as a peering point for the nine new subsea cables scheduled to be in operation in Lagos by 2023.

With a population of over 200 million, Nigeria is Africa’s most populous country and the seventh most populous in the world.  Its GDP is the largest in Africa and was the 26th largest globally in 2019.  With a large and young population, a growing and diversifying economy as well as a maturing regulatory environment, Nigeria has experienced strong economic growth in recent years.

As part of the transaction, the joint venture is also acquiring a land parcel adjacent to the Lagos data center to provide near-term expansion capacity.  Medallion’s management team, led by CEO and co-founder Ike Nnamani, will continue to lead the business.

Separately, Digital Realty and Pembani Remgro Infrastructure Fund have successfully partnered with Kenyan data center operator iColo since 2019, and iColo announced today that it will enter Mozambique through the development of its first data center in the country, located in the capital and port city of Maputo.

The iColo campus in Mombasa was recently expanded to deliver an additional 1.6 megawatts of power and 12,900 square feet of capacity for new and existing customers, along with the new subsea cable landing equipment.  In addition, iColo has expanded its Nairobi campus with the acquisition of an additional 215,000 square feet of land that will support 14 megawatts of future data center capacity.

Africa is evolving into a major interconnection hub for data-driven businesses that require a scalable, future-proof platform to facilitate global hybrid and multi-cloud infrastructure.  The deployment of PlatformDIGITAL®, Digital Realty’s market-leading global data center platform, across Africa will enable multinational and local businesses to rapidly scale their digital transformations by deploying critical infrastructure with a leading global data center provider at the heart of a growing connected data community in the region.

A. William Stein, Chief Executive Officer, Digital Realty: “Over the next decade, there will be huge opportunity for global businesses to tap into Africa’s expanding internet economy – with predictions that it could reach 5.2% of the continent’s GDP by 2025, contributing nearly $180 billion to its economy (up from $115 billion in 2020).  By 2050, the internet economy has the potential to contribute $712 billion1.  Through major investment in the continent’s internet infrastructure, Digital Realty aims to be a core enabler of these economic and quality of life gains.

There is a huge opportunity to both meet growing customer demand for connectivity in Africa and improve the internet infrastructure that serves over one billion people2 who don’t yet have proper access to the benefits of internet.  The expansion of our platform announced today is a leap forward but it’s just the start of our $500 million commitment to investment in the continent over the next decade.  We see a huge opportunity to underpin Africa’s expanding internet economy and play a central role in its growth.”

Rahiel Nasir, Research Analyst at 451 Research, part of S&P Global Market Intelligence: “”With its youthful population, Africa has seen the rise of a tech-savvy generation that is fueling ever-greater demand for digital services.  This is being boosted by the expansion of fiber networks, terrestrial and subsea connections that continue to connect major metro areas34.  Data centers play a vital role in the communications infrastructure landscape.  Without them, further digital development across the continent risks hitting a roadblock, especially for enterprises seeking colocation and cloud services as part of their digital transformations5.  According to our latest forecasts, overall multi-tenant data center capacity in the Middle East and Africa will see a compound annual growth rate of 10% from 2020 to 2023.  We estimate that net operational floorspace will increase from 5.4 million to 7.2 million square feet during the forecast period, with net UPS power rising from around 733 megawatts to almost 900 megawatts6.”

Rakesh Kukreja, Managing Director at iSAT Africa: “We need to make internet access affordable, reliable and power efficient for people in rural areas of Africa where low potential revenue and difficulty reaching customers have previously made it impossible.  Digital Realty and Pembani Remgro Infrastructure Fund’s expansion across Africa will bring IP aggregation points closer to much of Africa’s underserved population, and alongside innovations like LTE and Optimized Satellite for 3G, 4G and Wi-Fi networks, are now helping tackle this challenge.  iSAT Africa’s focused aim is to bring these technologies together towards bridging the digital gap in rural and ultra-rural African communities, in addition to bringing the benefits of good connectivity to people and businesses everywhere.”

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