Teraco today announced the conclusion of a syndicated loan facility worth R11.8 billion, which the company says it will use to drive growth and service its debt.
In a statement today, the SA-based carrier-neutral data centre and interconnection services provider says R5.7 billion of the loan will be used to finance the company’s continued growth, and R6.1 billion will refinance and extend the average maturity profile of existing drawn debt.
According to Teraco, the new facilities mature in December 2028, providing a 2.9-year extension of the weighted average tenor.
The loan comes after US-based Digital Realty – one of the largest global providers of cloud and carrier-neutral data centre, colocation and interconnection solutions – concluded the acquisition of Teraco in August last year.
This, as the race to build data centres in South Africa continues to hot up, with most organisations migrating their workloads into the cloud.
With the landing of the massive subsea internet cables on South African shores, data centre providers also see this as an opportunity.
According to a recent report by Console Connect Africa, an estimated amount of over R100 billion will be invested in carrier-neutral data centres in Africa over the next three to five years.
The report notes the inflow of investment in Africa has consolidated and internationalised the carrier-neutral data centre sector.
It points out that three of the big players that have come to the continent – Digital Realty, Equinix and Vantage – all have international networks of data centres across the globe.
Says Teraco in a statement: “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 put sustainability first, minimise environmental impact, reduce energy consumption and minimise water usage,” says Samuel Erwin, chief financial officer of Teraco.
“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.
“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,” he adds.
The firm explains the syndicated loan, led by Absa, includes several large financial institutions, and provides an avenue for further funding in the future.
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