Data Centers in Cape Town

Cape Town – Africa's Premier Cloud & Subsea Cable Hub

Cape Town is a primary interconnection hub for Southern Africa, offering robust connectivity to both African and international markets. Its strategic location, with landing points for major subsea cables, provides low-latency routes to Europe and the Americas, making it a critical location for content delivery, cloud services, and disaster recovery for the continent. This market is ideal for enterprises needing a stable, well-connected base to serve the fast-growing African digital economy.

Cape Town: At A Glance

Network & Connectivity Ecosystem

Cape Town has firmly established itself as a key digital gateway for Africa. It serves as a major landing point for numerous subsea cables connecting the continent to the world, offering redundant, low-latency paths.

Carrier Density & Carrier Neutrality: The market features over 20 network carriers as of September 2025. Carrier-neutral facilities provide extensive choice for local and international transit, ensuring competitive pricing and high-performance connectivity.

Direct Cloud On-Ramps: With one on-ramp connecting to four cloud regions as of September 2025, Cape Town offers direct, private access to major cloud providers. This includes dedicated connections to AWS and Microsoft Azure, enabling secure and reliable hybrid cloud deployments.

Internet Exchange Points (IXPs): The market is served by INX-ZA, the Internet exchange point for South Africa. The presence of local exchange nodes in Cape Town reduces latency by allowing local traffic to be exchanged directly rather than routing through other national or international hubs.

Bare Metal: Bare metal server options are widely available from multiple providers. Global suppliers like Hivelocity and phoenixNAP offer dedicated server solutions, allowing businesses to deploy high-performance computing without capital investment in hardware.

Power Analysis

South Africa's power infrastructure presents both opportunities and challenges. While the grid is extensive, reliability and cost are key considerations for data center operators.

Average Cost Of Power: Industrial electricity rates are estimated between ZAR 1.80–2.10/kWh as of September 2025. This cost structure directly impacts operational expenses for colocation and cloud services. The energy mix is predominantly coal, with a growing share from renewables.

Power Grid Reliability: The national power grid can experience instability, leading to scheduled outages known as "load shedding." However, data centers in Cape Town are built to high resiliency standards, with multiple substations, extensive battery backup (UPS), and on-site diesel generators to ensure continuous uptime for mission-critical operations.

Market Access, Business & Tax Climate

Cape Town provides a stable business environment with access to a skilled workforce and serves as a hub for technology and finance sectors.

Proximity To Key Business Districts: Data centers are located with strategic access to Cape Town's Central Business District (CBD) and surrounding commercial zones. This proximity benefits financial services, media companies, and tech startups that require low-latency connectivity.

Regional Market Reach: As a major coastal hub, Cape Town effectively serves all of Southern Africa. Its subsea cable connectivity makes it an ideal point of presence for companies targeting users across the continent and for international firms entering the African market.

Tax Advantage For Data Centers: South Africa does not currently offer specific tax incentives for the development or operation of data centers. Businesses operate under the standard corporate tax structure and are subject to the national 15% VAT on services.

Natural Disaster Risk

Cape Town has a moderate overall disaster risk profile, with specific environmental factors being the primary concern.

Based on the INFORM Risk Index, the region has a moderate risk score of 4.8 out of 10 as of September 2025. The most significant natural hazard is Drought, with a very high score of 8.8. Other notable but less severe risks include:

• River Flood (3.2)
• Coastal Flood (2.8)
• Earthquake (1.5)
• Tropical Cyclone (1.3)

Risks from tsunamis are considered minimal. Data center facilities are designed and located to mitigate exposure to flooding and other localized environmental threats.