Major SA data centre expansion plans emerge, set to more than double current power demand

Just over the past few months, plans for significant “hyperscale” expansion projects in South Africa have emerged that would push current IT power load to well over 1,200 MW – which is equivalent to just over one stage of Eskom load shedding (1,000 MW).

The two biggest expansion projects on the cards involve the Teraco Group (currently the largest data centre provider in SA with an IT load of nearly 190 MW) and the Johannesburg newcomer, the Cavaleros Group.

Shortly before Christmas, Cavaleros announced plans to build two new local data centres – a whopping 360 MW campus on a 100 hectare site in Cape Town and a 200 MW campus on a 40 hectare site in the Kosmosdal/Samrand area north of Johannesburg.

Whereas Teraco is a colocation operator (renting out data centre space to about 670 customers), the new Cosmas Data City project by Cavaleros is believed to be linked mainly to the Microsoft Corporation, which recently announced a multibillion-rand investment to expand its cloud and AI infrastructure in SA.

In a joint announcement by President Cyril Ramaphosa and Microsoft President Brad Smith, the US multinational confirmed a further investment of R5.4-billion (in addition to its previous investment of R20.4-billion over the past three years) to establish SA’s first “enterprise- grade” data centres in Johannesburg and Cape Town.

However, neither Cavaleros or Microsoft would confirm (or deny) whether they had entered a business relationship to develop the two Cosmas Data City developments – by far the biggest data centres in SA and Africa.

A spokesperson for Cavaleros said: “All information relating to occupiers or users is subject to strict non-disclosure agreements,” while Microsoft’s local PR consultants said: “Microsoft does not typically share details about its data centre suppliers and vendors and does not have any new updates to share at this stage.”

Cavaleros said the two new centres would be built in phases, but did not provide any timelines on commencement or completion schedules.

Meanwhile, a Teraco document listing current capacities and future expansion plans suggests that the company is targeting 500 MW in total data centre capacity. This would include 290 MW of new capacity in Johannesburg and a further 60 MW in Cape Town, but no timelines have been given.

Other players hoping to expand include Vantage Data Centres, which aim to provide a 100 MW load at two data campuses in Johannesburg.

Whereas the current and future expansion plans in SA may seem like small beer when compared with mega projects like Elon Musk’s 2 000 MW “Colossus” AI data centre in Tennessee, US, local energy analyst Chris Yelland points out that they are “not insignificant” – given the risk of possible supply constraints outlined in a recent Eskom energy outlook report.

Yelland, managing director of EE Business Intelligence, told Daily Maverick that – based on Eskom’s latest risk analysis report – increasing power demand from new large data centres (combined with a possible rollout of electric vehicle charging stations and government subsidies for mothballed metal smelters) would probably lead to constrained electricity supplies by 2029 unless substantial generation capacity was added rapidly.

Read more: Growth spurt of data centres could threaten SA’s electricity and water supply

In a separate analysis piece in Daily Maverick late last year, Yelland said Eskom had also cautioned about a “looming base supply cliff” due to the retirement of certain coal-fired power stations and the expiry of power imports from the Cahora Bassa Scheme. The Eskom power fleet’s energy availability factor (EAF) also remained critical.

Daily Maverick has asked Eskom to provide statistics on current and projected data centre power consumption, without success.

So, in the absence of transparent Eskom statistics and other government sources, the IT peak loads advertised by some data centres gives some indication of their local power use.

However, IT loads may not be an accurate yardstick to measure actual electricity consumption by data centres. Researchers at the Lawrence Berkeley National Laboratory in the US note that data centre servers rarely draw the full wattage for which they are rated on specification sheets.

In a report on US Data Center Energy Usage in 2024, Berkeley Lab scientist Dr Arman Shehabi and fellow laboratory researcher called for much greater transparency around data centres.

“Very few companies report actual data centre electricity use and virtually none report it in context of IT characteristics such as compute capacities, average system configurations and workload types. These details are often considered proprietary ...”

The IT loads reported by some local data centres also do not appear to take into account the electricity consumed for cooling and other uses. Depending on cooling mechanisms used, this additional electricity use can eclipse the apparent IT load.

How are centres managing growing power and water demand?

In response to questions from Daily Maverick, Cavaleros marketing manager Mikaela Potgieter said electricity supply and detailed power procurement structures were “commercially sensitive and therefore cannot be publicly disclosed”.

On whether it would draw power from Eskom alone or generate its own power (including renewable energy) Potgieter said: “Any planned additional supply will be regulated, and detailed configurations are not publicly disclosed.”

On whether carbon emissions from the two new Cosmas data sites had been estimated, Cavaleros said: “Environmental considerations are addressed through standard regulatory approval processes.”

Regarding direct and indirect water consumption of the two new centres, the company said water systems would be “designed in line with applicable industry standards and regulatory requirements. Further details are subject to strict non-disclosure agreements.”

Teraco, currently the largest data centre operator in SA, appears to have adopted a much more transparent approach.

For example, in its latest sustainability report, Teraco provides detailed statistics on total energy consumption over the past four years, along with estimated greenhouse gas emissions and the percentage of renewable or “clean” energy used to offset carbon emissions and power consumption from the national grid.

The company has begun construction of a 120 MW solar PV project in the Free State and also signed a power purchase agreement to source additional renewable wind energy supplies.

Teraco asserts that it is using “zero water” and closed loop cooling systems to reduce water consumption, but nevertheless reports using more than 34,000 kl during the 2025 reporting period (88% of which came from municipal supplies and the remainder from boreholes and rainwater).

“We are firmly on track to supply 50% of our total energy consumption from clean sources by 2027 and achieve 100% clean energy usage by 2035.

“By monitoring and tracking our water usage, our data centres maintain a low water usage effectiveness (WUE) ratio, using only 0.10 L/kWh in 2023, which is less than half a cup of water per IT kWh.

The company adds that: “We are investing massively to reach our targeted goal of 100% renewable energy by 2035 (considering that SA has a national utility that is largely 85% fossil-fuel-based).”

African Data Centres (which has centres in Johannesburg, Cape Town, Lagos and Nairobi) says it is “committed to achieving carbon neutrality/net zero by 2030 and maximising renewable energy for our pan-African data centre network”.

It has also signed a 12MW power purchase agreement that would increase renewable (wind) energy to over 33% of its South African energy mix through wheeling electricity to three of its local data centres. DM

*Additional reporting by Julia Evans.

In Part Three: The hidden impacts of AI data centres on water, climate and future power costs

This article was made possible in part through support from the Henry Nxumalo Foundation.