22 Apr The Africa data centre market by investment is expected to grow at a CAGR of approx. 15% during the period 2020-2026
The Africa data centre market size by investment was valued at USD 2 billion in 2020 and is expected to reach USD 5 billion by 2026, growing at a CAGR of 15% during 2021-2026. The data centre market expects to observe growth because of the flurry of factors – renewable power availability, smart city initiatives, and increased support for the digital economy, according to a new report from www.researchandmarkets.com
Egypt, South Africa, Kenya, Morocco, and Ethiopia are actively working toward improving the share of renewable energy in the region’s electricity generation. Africa is an emerging leader in microgrid capacity. Grid-connected, on-site energy generation or storage plants help data centres control power costs more efficiently by saving on peak demand costs charged by traditional grid facilities. Both colocation and enterprise operators invest heavily in adopting renewable energy sources to power data centre.
The Africa IT infrastructure market expects to reach approx. USD 4 billion by 2026. The growth in data generation in Africa is fuelling the demand for fast-processing efficient servers. The demand for build-to-suit infrastructure is growing to support specific applications. Several segments such as BFSI, healthcare, transportation and logistics, education, and heavy industries adopt advanced server systems for efficient services.
The unreliable power grid connectivity increases the demand for power backup sources. UPS and generator systems are expected to grow due to the increased construction of large and mega data centre facilities. The Kenya data centre market has witnessed the installation of energy-efficient power infrastructure. Most facilities are of Tier III standards and are adopting power redundancy of N+1 or 2N to manage power grid instability. Colocation service providers are likely to emerge as contributors to the lithium-ion UPS solutions market.
Vendors are continuously offering innovative UPS solutions to boost efficiency and reduce cost. The construction of extensive facilities across Africa is likely to boost the generators market. The growing complexity of data centre infrastructure is driving the demand for automated switchgear technology. Medium- and high-voltage switchgear are more likely to be adopted than low-voltage switchgear. The demand for intelligent PDUs among colocation end-users is growing as there is an increasing need to meter and monitor rack power consumption.
Data centre facilities operating in the African region mainly adopt chillers and precision air cooling. The adoption of air-based cooling (free cooling chillers) is likely to gain traction as certain African countries experience cold winter seasons. South Africa is likely to adopt free cooling chillers or evaporative coolers.
The cooling systems market depends on the construction of mega and hyperscale facilities, primarily of 10 MW capacity. While several smaller facilities in Africa use DX-based CRAC units, medium and large data centre are installing CRAH units. Also, the implementation of air-cooled CRAC systems with cooling units that use refrigerants or glycol-based cooling is expected to grow during the forecast period. Data centre in Morocco have witnessed the adoption of precision cooling systems, chilled water-cooling systems, and free air-cooling systems.
Most colocation facilities are funded by enterprise and government agencies; however, the actual investment in greenfield projects is low. Government initiatives to offer tax incentives expect to fuel general construction services during the forecast period. However, the shortage of skilled workforce construction and operational benefits is the major reason organisations select modular providers to perform installation and operation services. The increasing OPEX is likely to boost the implementation of DCIM solutions.
The rapid growth in colocation data centre will drive investments in physical security systems in the African market. In South Africa, most colocation facilities have installed physical security solutions, ranging from perimeters to racks guarded via CCTV cameras and biometric systems. Companies have also adopted DCIM solutions that enable remote monitoring of data centre operations. Data centre operators in Kenya use several security systems such as biometric access systems, perimeter fencing, and CCTV surveillance solutions.
In 2020, the Africa data centre market witnessed Tier III facilities’ dominance, especially for colocation services. 10 out of the 11 tier III facilities developed were colocation data centres in 2020. The trend expects to continue during the forecast period, with several operators expecting to shift to Tier IV facilities due to the growth in rack power densities and increase in critical data centre applications during the forecast period. Most new facilities are designed to be of Tier III standards with a minimum of N+1 redundancy. They can be reconfigured with up to 2N+2 redundancy with the incorporation of flexible data centre designs. Most facilities in Kenya are built according to Tier III standards with standard redundancy of N+1 or N+N for support infrastructure, including cooling systems. Similarly, facilities in South Africa are designed to be tier III standards, which are flexible to be converted into Tier IV facilities.