Africa50 Acquires 43% Stake in Egypt's Raya Data Center for $15M

AFRICAN STOCKS AND FINANCEDecember 17, 2024 at 11:57 AM UTC

TLDR

Africa50, through its Infrastructure Acceleration Fund (IAF), invested $15 million for a 42.9% equity stake in Raya Data Center (RDC), a subsidiary of Raya Information Technology
The transaction, part of a $25 million funding round that includes $10 million in debt from Raya IT, values RDC at $35 million
The deal aligns with Africa50’s strategy to strengthen Africa’s digital infrastructure. Local data centers like RDC enhance cybersecurity, improve data access speeds, and reduce costs

Africa50, through its Infrastructure Acceleration Fund (IAF), invested $15 million for a 42.9% equity stake in Raya Data Center (RDC), a subsidiary of Raya Information Technology. The transaction, part of a $25 million funding round that includes $10 million in debt from Raya IT, values RDC at $35 million.

The investment will fund a certified Tier III greenfield data center in Egypt, catering to hyperscalers such as cloud service providers and large tech companies. Construction is set to begin in January 2025. CI Capital acted as RDC’s financial advisor.

The deal aligns with Africa50’s strategy to strengthen Africa’s digital infrastructure. Local data centers like RDC enhance cybersecurity, improve data access speeds, and reduce costs, supporting Africa’s digital transformation and regulatory compliance. The IAF, which raised $250 million in its first close toward a $500 million target, targets medium- to large-scale projects across energy, transport, digital, and water infrastructure in Africa.

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Key Takeaways

Positioned strategically at the intersection of Africa, the Middle East, and Europe, Egypt handles over 17% of global internet traffic. Its digital transformation initiatives, such as Digital Egypt, promote data localization, attracting international cloud providers seeking secure and efficient local hosting. The rising demand for Tier III certified data centers reflects the surge in regional cloud computing and data storage needs driven by hyperscalers. RDC’s development addresses inefficiencies tied to offshore data hosting, supporting compliance with privacy regulations and enhancing reliability. The move comes amid Africa’s push to expand its digital infrastructure. Investments like Africa50’s IAF are crucial to meeting the continent’s digital economy goals while offering attractive risk-adjusted returns. With proven expertise and Egypt’s digital growth, RDC is expected to deliver strong performance, capitalizing on Egypt’s connectivity and rising data storage demand.

Finance

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Infrastructure

Digital Infrastructure

Raya Data Center

Africa50

Infrastructure Financing

Data Centers