Influx of Data Center Investors Near Lagos’ Shoreline

First a data centre is an actual location with a structure that houses computer systems and related parts, such as storage and telecommunications equipment, that are intended to handle and store vast volumes of data. It is also a facility that uses a sophisticated network, computing, and storage infrastructure to give shared access to data and applications. There are industry standards to help with the planning, building, and upkeep of data centre infrastructures and facilities to guarantee highly accessible and secure data.

International investors are flooding into Victoria Island and the Lekki Peninsula, two of Lagos’ most wealthy metropolitan districts, hoping to capture a piece of the city’s expanding data centre industry, which is expected to reach 80 megawatts (MW) by 2027.

Lagos Island is poised to overtake Johannesburg’s 200MW capacity as Africa’s second-largest data centre hub due to its close proximity to eight underwater internet cables. However, the competition for Lagos’ beachfront highlights the risks and rewards of placing bets on Africa’s dispersed data economy.

“Coastal data centres are built near submarine cable landing stations (CLS) to improve speed and efficiency and to act as backup hubs, keeping networks running even if inland connections go down.” The closer a data centre is to a CLS, the faster data can travel, reducing delays, according to Ayotunde Coker, CEO of Open Access Data Centre (OADC).

“Infrastructure accessibility, landing station proximity, and standard site selection criteria are what drive investors to construct data centres on Victoria Island,” Coker told TechCabal.

With a tremendous capacity of up to 144 terabits per second (Tbps), Google’s Equiano submarine cable lands right at OADC’s carrier-neutral, Tier III-certified facility in Lekki. Similarly, the MDXi data center, MainOne’s Tier III-certified facility in Lekki, Lagos, is directly connected to the 10 Tbps MainOne submarine cable.

Nigeria’s eight underwater cables—including Google’s Equiano and 2Africa—make ashore along the Lagos Island coastline, linking to terrestrial fibre-optic networks for larger distribution.

With 10 of Nigeria’s 16 data centers already located in Victoria Island, Lekki, and Eko Atlantic City, operators are rushing to add more capacity. Equinix’s 20MW facility, Kasi’s 5MW centre, Nxtra by Airtel’s 38MW data centre, and Open Access Data Centre’s 24MW facility are among the projects currently under construction; all are expected to be completed by 2027. These new data centres, along with ongoing developments throughout the nation, will increase Nigeria’s total capacity from 64MW to about 200MW. By bringing data processing closer to users, these facilities will decrease latency, improving the performance of cloud services, streaming, and online gaming. Additionally, the increased capacity will improve network reliability, minimizing downtime and guaranteeing more stable connectivity.

Urbanization, water, and power adds to the connectivity in Lagos’ growing electrical infrastructure attracts investors. Victoria Island and Lekki are designated “Band A” service zones because they are important metropolitan hubs and provide 20 to 24 hours of energy per day, which is essential for data centre operations.

Wole Abu, managing director of Equinix West Africa, stated that the Lekki Corridor’s power infrastructure is more reliable both now and in the future than other areas of Lagos.

The availability of water for cooling systems, which keeps them efficient and avoids overheating, is another factor in the selection of coastal locations. An estimated 309 million gallons of water were used daily by data centres worldwide in 2023, which is enough to sustain 3.3 million people. As additional AI-driven data centres are built, this need is predicted to increase to 468 million gallons per day by 2030.

A surge of urbanization throughout the world is reflected in the growing investment in Lagos’ data centres. Urbanization, aging populations, and changing consumer behaviour are the main factors driving the growth of digital infrastructure, according to a recent Bank of America Institute report. According to UN estimates, by 2050, over 66% of people on Earth will reside in cities, with industrialized countries accounting for 87% of this development. Asia and Africa will account for 90% of this urbanization.

Eko Atlantic, one of the ultra-urban zones, is envisioned as a state-of-the-art smart metropolis including top-notch infrastructure, high-rise structures, upscale real estate, and sophisticated flood protection technologies. Despite being in the early stages of growth, it has drawn significant investments in data centres and is home to two hyperscale facilities: Nxtra by Airtel and Africa Data Centres’ Tier III data centre.

If investors can ride the wave, Lagos’ shoreline continues to be the most sought-after destination in town for data centre hub establishment.