Teraco gets R11.8bn for expansion

South Africa’s leading carrier-neutral data centre provider, Teraco, has landed a loan worth R11.8 billion, of which half will be used to finance continued growth.

A homegrown company that was acquired by Digital Realty last year, Teraco is positioned as a “carrier-neutral data centre and interconnection services provider”, meaning that it provides services to all players on the industry, without favouring its own operations, as would be the case with data centres owned by network providers, for example.

On Tuesday, it announced the conclusion of a syndicated loan facility to the value of R11.8-billion, of which R5.7-billion will be used to finance the company’s continued growth, and R6.1-billion will refinance existing debt.

The growth funding is for the expansion of Teraco’s key interconnection hubs located within the Isando, Bredell, and Cape Town campuses, and a significant renewable energy generation programme aligned to the company’s long-term Environmental, Social and Governance (ESG) goals. Teraco’s new data centre builds are designed to for sustainability, minimising environmental impact, reducing energy consumption, and minimising water usage.

“As a leading carrier-neutral data centre and interconnection solutions provider, Teraco is dedicated to protecting, connecting, and growing the enterprises and ecosystems shaping Africa’s digital future sustainably and responsibly,” says Samuel Erwin, chief financial officer at Teraco. “As we continue our journey, our ESG goals form the cornerstone of how we grow our business, engage with employees and suppliers, support our clients, and minimise our impact on the environment.

“We are committed to managing our environmental impact sustainably by optimising our use of energy and natural resources. We remain focused on efforts to create energy-efficient data centres that address our environmental challenges, and we’re grateful for the continued support from partners that share our vision.”

The syndicated loan, led by Absa, includes several large financial institutions, and provides an avenue for further funding in the future. The continued appetite to fund Teraco is driven by its track record and Digital Realty’s shareholding. Digital Realty is a global investment grade rated majority shareholder in Teraco that shares the company’s sustainability commitment.

As most enterprise organisations accelerate their digital transformation strategies and place greater focus on cloud adoption strategies, says Teraco, these same businesses are looking for the ability to scale in a sustainable way. This is a source of competitive advantage in a world where fast and secure interconnection with strategic business partners is a priority.