Construction Industry Today

The Data Center Construction Market Investment in Middle East and Africa Region to Witness More than 2X Growth Over the Next 6 Years-Arizton

Middle East Data Center Market Investment to Surpass $4.26 Billion in 2028.
Published 14 July 2023

According to Arizton’s latest research report, the Middle East & Africa data center construction market will grow at a CAGR of 8.54% from 2022-2028.

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In Middle East & Africa region, UAE & Saudi Arabia are major contributors to the capacity with around 30% and 27%, and the market in these countries is expected to skyrocket in four to five years due to the shift of the oil economy to the digital economy. In addition, South Africa is the major contributor to the capacity in Africa, with more than 50%; Nigeria and Kenya follow South Africa. Cloud-based services, smart city developments, and fiber connectivity drive continuous regional data center investments.

Countries in the Middle East & Africa will see the installation of inland and submarine network connectivity, leading to higher data center development driven by efforts from government agencies, telecommunication service providers, and utility providers. The data center construction market in the Middle East & Africa is led by countries such as the UAE, Saudi Arabia, South Africa, Kenya, Egypt, Israel, Bahrain, Oman, Kuwait, and Turkey. Telecommunication providers, enterprises, governments, cloud, and colocation service providers are the major investors in developing regional data center facilities.

Market Dynamics      

  • Cloud Adoption Driving Data Center Investments
  • IoT & Big Data fueling Data Center Investments
  • On-Premises Infrastructure Migrating to Colocation & Managed Services
  • Deployment of the Modular Data Centers

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Investment Overview

  • The Middle East & Africa data center market has witnessed data center investments from telecommunication companies, colocation data center operators, and cloud providers.
  • Dubai, Abu Dhabi, Riyadh, Jeddah, Neom, Johannesburg, Nairobi, Istanbul, and Kuwait City are the major locations for data center development, whereas Doha and Sharjah were emerging as new locations for data center development.
  • In terms of 5G network deployment, the UAE, Saudi Arabia, South Africa, Kenya, Kuwait, Bahrain, Nigeria, Oman, Turkey, Israel, and Qatar have witnessed 5G network deployments on a commercial and trial basis.
  • The market also attracted investments from cloud service providers such as Google, Amazon Web Services, Microsoft, Oracle, and Tencent across the Middle East & Africa. Major cloud service providers are expanding in the region during the forecast period. For instance, Microsoft announced its intention to open a cloud region in Saudi Arabia
  • Initiatives for developing smart cities are observed in the UAE, Saudi Arabia, Kuwait, Oman, and Bahrain. For instance, in Saudi Arabia, NEOM is a $50 million smart city project expected to reach completion by 2025.
  • The rise in demand across industries has led data center operators to sign several M&A contracts and enter joint ventures (JVs) to expand their portfolios across the Middle East & Africa
  • In September 2022, Khazna Data Centers and BEEAH Digital formed a JV. The JV will be termed as One Data Center SPV. The newly formed company plans to build a 9-MW data center in Sharjah, UAE
  • In June 2022, G42 (Group 42) and Etisalat (e&) officially merged their data center businesses and operated them under Khazna Data Centers JV. On receiving approval, Khazna Data Centers will be the largest data center provider in the UAE, with 12 data center facilities.
  • In March 2022, Equinix partnered with Omantel to build a second data center facility SN1 in Salalah, Oman.

Power Capacity Development

The UAE, Saudi Arabia, Bahrain, Kuwait, Jordan, Qatar, Oman, Turkey, South Africa, Nigeria, Kenya, Egypt, Morocco, Ethiopia, and Ivory Coast are some countries that shall witness investments in renewable energy to improve the power stability in their respective countries during the forecast period. The world is moving toward attaining sustainable energy targets, despite Middle East & African countries traditionally having low levels of renewable energy output due to their heavy reliance on fossil fuel-based energy production. Countries are taking initiatives to develop renewable energy projects to meet their carbon-neutral goals. For instance, the Israel government announced that it aims to achieve net zero emissions by 2050.

Most data center operators are investing in developing green data centers or powering their data centers with 100% renewable energy to meet the regional countries' net zero carbon emission targets. For instance, In February 2023, Moro Hub announced the launch of a green data center facility located in Mohammed bin Rashid Al Maktoum Solar Park, powered by 100% solar energy and adds up to 100 MW of power capacity once fully built. MTN, a South Africa-based telecom company, operates four data centers in Kenya and other African countries, uses renewable energy to power its data center, and targets carbon-neutral by 2040. It has introduced the “Project Zero” program. Oracle launched a cloud region in Johannesburg in January 2022 and has pledged that all its global cloud regions, including Johannesburg, will be powered by 100% renewable energy by 2025. In June 2022, Vantage Data Centers signed a 20-year-long Power Purchase Agreement (PPA) with SolarAfrica in which the company will procure solar energy of around 87MWp that will be used to power its Johannesburg data center campus.

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The report includes the investment in the following areas: 

Infrastructure

  • Electrical Infrastructure
  • Mechanical Infrastructure
  • General Construction

Electrical Infrastructure

  • UPS Systems
  • Generators
  • Transfer Switches & Switchgear
  • PDUs
  • Other Electrical Infrastructure

Mechanical Infrastructure

  • Cooling Systems
  • Racks
  • Other Mechanical Infrastructure

Cooling Systems

  • CRAC and CRAH Units
  • Chillers Units
  • Cooling Towers, Condensers, and Dry Coolers
  • Other Cooling Units

Cooling Techniques

  • Air-based Cooling
  • Liquid-based Cooling

General Construction

  • Core & Shell Development
  • Installation & Commissioning Services
  • Engineering & Building Design
  • Fire Detection & Suppression
  • Physical Security
  • DCIM/BMS Solutions

Tier Standard

  • Tier I & Tier II
  • Tier III
  • Tier IV

Geography

  • Middle East
  • The UAE
  • Saudi Arabia
  • Bahrain
  • Oman
  • Kuwait
  • Qatar
  • Israel
  • Jordan
  • Other Middle Eastern Countries
  • Africa
  • South Africa
  • Kenya
  • Nigeria
  • Egypt
  • Ethiopia
  • Other African Countries

Major Vendors

Prominent Support Infrastructure Providers

  • 4energy
  • ABB
  • Airedale
  • Alfa Laval
  • Canovate
  • Caterpillar
  • Cummins
  • Delta Electronics
  • EAE Group
  • EATON
  • Envicool
  • EVAPCO
  • Enlogic
  • HITEC Power Protection
  • Johnson Controls
  • Legrand
  • Master Power Technologies
  • Rittal
  • Rolls-Royce
  • Schneider Electric
  • Siemens
  • STULZ
  • Vertiv

Prominent Data Center Construction Contractors

  • AECOM
  • AlDar Properties
  • Anel Group
  • Arup
  • Ashi & Bushnag
  • Atkins
  • Abbeydale
  • Advanced Vision Morocco
  • ARSMAGNA
  • b2 Architects
  • CAP DC
  • Chess Enterprises
  • Copy Cat Group
  • Dar Group
  • DC Pro Engineering
  • Deerns
  • Eastra Solutions
  • Edarat
  • EGEC
  • ENMAR Engineering
  • EDS Engineers
  • Egypro
  • Harinsa Qatar (HQ)
  • HATCO
  • HHM Building Contracting
  • Hill International
  • H&MV Engineering
  • Ingenium
  • Interkel
  • ICS Nett
  • INT’LTEC
  • ISG
  • JLB Architects
  • Laing O’Rourke
  • Linesight
  • M+W Group (Exyte)
  • Mace
  • Mercury Engineering
  • McLaren Construction Group
  • MIS
  • MWK Engineering
  • NDA Group
  • Orascom Construction
  • Prota Engineering
  • Qatar Site & Power
  • RED Engineering
  • RW Armstrong
  • Royal HaskoningDHV
  • Shaker Group
  • Sterling & Wilson
  • Summit Technology Solutions
  • Sudlows
  • Telal Engineering & Contracting
  • Tri-Star Construction
  • Turner & Townsend
  • United Egypt
  • Westwood Management

Prominent Data Center Investors

  • 21st Century Technology
  • Africa Data Centres
  • Adgar Investments and Development
  • Amazon Web Services (AWS)
  • Batelco
  • Bynet Data Communications
  • Digital Parks Africa
  • Equinix
  • Etisalat
  • EdgeConneX
  • Future Digital Data Systems
  • G42
  • Gulf Data Hub
  • Google
  • Galaxy Backbone
  • icolo.io (Digital Realty)
  • IXAfrica
  • Khazna Data Centers
  • Moro Hub
  • MedOne
  • MEEZA
  • Mobily
  • MainOne
  • Medallion Communications
  • Microsoft
  • NTT Global Data Centers
  • Oman Data Park
  • Ooredoo
  • Paratus Namibia
  • Rack Centre
  • Raxio Data Centres
  • stc
  • Serverfarm
  • Turkcell
  • Türk Telekom
  • Telehouse
  • Telecom Egypt
  • Teraco (Digital Realty)
  • Tencent Cloud
  • Wingu

New Entrants

  • Airtel Nigeria
  • Cloudoon
  • Compass Datacenters
  • Digital Realty
  • EDGNEX
  • Global Technical Realty
  • Infinity
  • Kasi Cloud
  • Open Access Data Centres (OADC)
  • Vantage Data Centers
  • Quantum Switch
  • ZeroPoint DC

ARIZTON’S EXPERTISE IN THE DATA CENTER INDUSTRY 

We continuously track data center investments worldwide and strive to provide accurate market analysis on investments across 20+ infrastructure categories. 

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