Inside Teraco, Africa’s data infrastructure leader

As part of the Futuregrowth Infrastructure & Development Bond Fund's 30-year anniversary, clients recently joined our investment team for a tour of Teraco Data Environments, Africa's largest and most interconnected data centre.

For many, it was a chance to step inside the physical backbone of South Africa’s digital economy: vast, temperature-controlled corridors filled with racks of servers and fibre connections.

It is a world of humming machines protected by layers of physical and digital security, where the data of some of the world’s largest technology companies is safely stored and managed.

 The unseen infrastructure behind the internet 

Teraco provides the power resilient, highly secure and neutral colocation facilities that enable South Africa’s growing digital economy to function. From cloud providers and financial institutions to telecom operators and government agencies, the company’s more than 680 clients depend on its ability to deliver 99.999% uptime, ensuring a constant flow of information that underpins commerce, connectivity, and communication across the continent. 

For institutional investors, this kind of infrastructure represents the new frontier of essential services. Data centres have become as critical to modern life as transport networks or power plants, supporting everything from mobile banking and streaming to AI, logistics, and digital health systems. 

Why Futuregrowth invested 

Futuregrowth, acting on behalf of its clients, has committed R1.5 billion to Teraco through a syndicated loan transaction, positioning the fund as the second-largest institutional funder in the latest debt capital raise.

The investment supports the company’s continued expansion in South Africa and contributes funding for renewable energy and efficiency initiatives.  

Teraco's JB3 campus, Isando Johannesburg. Image: Teraco

The rationale was clear: Teraco sits at the intersection of digital inclusion, economic growth, and sustainability – three pillars central to Futuregrowth’s developmental investment mandate.  

As South Africa and the continent digitise at speed, the demand for secure, low latency, and locally hosted data continues to surge. Teraco’s platform provides this capacity while also driving down costs, improving reliability, and keeping African internet traffic local through NAPAfrica, the continent’s largest internet exchange and one of the ten largest globally by traffic volume. 

Resilience engineered into every system 

What struck visitors during the site tour was Teraco’s commitment to engineering for redundancy and resilience, a design philosophy born from operating in a constrained energy environment. 

Each facility is built for high availability, meaning that if any single system fails, another immediately takes over. Power is supplied through a combination of municipal and Eskom grid connections, backed by extensive generator capacity. 

The company stores significant volumes of diesel on site to ensure continuity during grid disruptions, supported by environmental permits and strict safety compliance. “We design for failure,” one of Teraco’s engineers explained, “so our clients never experience it.” 

Investing in grid stability 

A lesser-known aspect of Teraco’s business, and one that resonated strongly with clients, is the company’s direct investment in electrical substations and grid infrastructure. As demand for data capacity grows, so too does the need for reliable, high-voltage power supply.

Municipalities often require substation upgrades before granting additional load connections, but budget constraints can delay such projects for years. 

For all its large data centre projects, Teraco invests, together with Eskom and the municipalities, in high and medium-voltage substation infrastructure. 

This proactive approach not only ensures operational reliability but also contributes to broader grid resilience. It is a public-good outcome that exemplifies how long-term institutional capital can be catalytic, unlocking growth in adjacent systems and stimulating local economic activity. 

Sustainability: from solar to circular systems 

While power resilience remains central, Teraco’s next evolution is about power sustainability. The company has committed to sourcing 100% of its energy from renewables by 2035 and achieving zero waste to landfill by 2028. 

A key milestone is the development of a 120 MW solar photovoltaic plant near Parys, designed to supply clean energy to its data centres via wheeling agreements. Achieving these required years of collaboration between Eskom, municipal distributors, and regulators, a process that Teraco helped pioneer, setting a precedent for other large energy users. 

Rooftop solar equipment at Teraco's JB3 data centre campus. Image: Teraco

On site, efficiency and environmental management are equally advanced. Teraco’s facilities use closed-loop water cooling systems, which are filled once and recirculate continuously, minimising water usage and protecting operations during potential “water-shedding” events.

These efforts have earned the company an EcoVadis Bronze sustainability rating, and placing it among the leading data-centre operators globally in environmental and governance practices. 

Connecting energy and digital transformation 

The tour also highlighted how data centre growth and energy transition are increasingly interlinked. Facilities like Teraco’s are both large energy consumers and potential catalysts for renewable generation. 

Futuregrowth is also financing solutions on the other side of that equation through investments such as Decentral Energy: embedded, decentralised clean energy systems that enhance resilience for South African businesses while reducing reliance on the national grid. Together, these investments reflect an integrated vision of a digital economy powered by sustainable energy systems.

As South Africa navigates the complexities of load management, flexible generation and storage, the synergy between power and digital infrastructure will become even more critical. 

A proven platform for impact 

With over R21 billion in assets under management the Futuregwrowth Infrastructure and Development Bond Fund (IBF) has a 30-year track record of financing transformative assets across the country. The IBF has consistently demonstrated that long-term, inflation-beating returns can go hand in hand with measurable social and environmental impact. 

Read: Three decades of purpose-driven investing

Its ability to invest in high-yielding private debt alongside listed assets provides the flexibility to navigate complex markets while supporting critical national priorities such as renewable energy, transport infrastructure, digital connectivity, and affordable housing. 

As SA continues to modernise its energy and digital systems, the IBF’s portfolio stands as living proof that developmental investing is not charity: it is disciplined, future-oriented capital deployment can deliver resilient returns and real-world outcomes.