South Africa’s data centre boom has been all over the news lately, and it is worth pulling the threads together because the trade-offs are real.
The scale. We already host around 70% of Africa’s data centres, roughly 50-plus facilities at about 350 MW combined. That is still under 1% of global capacity, so the growth runway is huge. The market is tipped to more than double to about 5 billion dollars by 2031, with a pipeline worth around R50 billion over three years. Microsoft has pledged another R5.4 billion for AI infrastructure in Joburg and Cape Town, Vantage and Attacq are building an 80 MW site, and NVIDIA switched on its first local AI facility in June. Government has warmed up too, with Treasury now talking about incentives and putting data centres in the same policy bracket as energy and ports.
That is the good news. Here are the issues being raised.
1. Electricity. Even a modest data centre draws power equal to thousands of households. In Cape Town, four new facilities could consume the equivalent of 34% of the city’s current supply. Eskom’s own risk analysis reportedly warns supply could be constrained by 2029 without fast new generation, even though Eskom publicly says “there is no pressure on the grid”. After the load shedding years, plenty of people are nervous.
2. Water. Traditional cooling can use hundreds of thousands of litres a day. Operators like Teraco say closed-loop systems cut a 30 MW site to roughly the annual water use of an average restaurant. Reassuring if accurate, but this is a country that lived through Day Zero.
3. Transparency. Maybe the biggest one. There are no official national or local figures on how much power and water these sites actually use, almost everything is self-reported. Campaigners have flagged thin community consultation and weak environmental disclosure, calling it a “gold rush” with no proper conversation about priorities.
The real question: do households and existing businesses end up competing with hyperscale AI facilities for the same scarce power and water, and are we being told enough to judge that fairly?
Keen to hear what others think. Growth engine we need, or handing our grid and dams to global tech firms without asking hard enough questions?
Sources: Engineering News, 22 Jul 2026, Daily Maverick on Cape Town’s 34%, TechCentral on the policy shift