Loni Prinsloo (Bloomberg) -- Liquid Telecom has raised $307 million through a rights issue to fund a rapid expansion of its data center business across Africa.
The rights issue included an additional $40 million from U.K. development finance institution CDC Group Plc, the group said in a statement.
Africa’s largest fiber-network operator is planning to expand its data center unit in five of the continent’s fastest growing countries including Egypt and Nigerias, said Stephane Duproz, Liquid’s Africa Data Centres head, via emai.
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. Although Africa’s data center capacity has doubled in the past three years, it still accounts for less than 1% of the global total, according to data from Xalam Analytics.
“Africa has significant untapped economic potential that is being unlocked by improving connectivity, data storage and the use of cloud-based applications,” Liquid Telecom Chief Executive Officer Nic Rudnick said in an email.
Amazon.com Inc., Huawei Technologies Co. and Microsoft Corp. have been among companies investing in data center capacity in African countries in recent years. The market’s attracting buyout firms, as well. 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 working on other major countries over the continent, Duproz said. It’s also acquiring a data center from Standard Bank Group Ltd. 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 CEO Nick O’Donohoe. “Investing in Africa’s digital infrastructure is vital for building resilience within African economies and accelerating their growth.”
CDC, funded by the U.K. government, will invest more than $1.5 billion in African and Asian businesses this year.
Liquid Telecom, which is majority owned by Econet Global Ltd., has built more than 70,000 kilometers (43,500 miles) of fiber, and operates five data centers in South Africa, Kenya and Rwanda.