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Ken Ofori-Atta, Minister of Finance
Ken Ofori-Atta, Minister of Finance

Ghana secures first IMF bailout windfall "Data centre part of $300m US IDFC loan"

The country has secured its first foreign direct investment as a result of the International Monetary Fund (IMF) approval of an economic recovery programme for the country.

The investment is a world-class 10 megawatts (MW) data centre, expandable to 30MW, to be located within the Trade Fair Redevelopment Project in La in the La Dadekotopon municipality in the Greater Accra Region.

The President of the United States, Joe Biden, who announced the approval of the investment last Saturday at the 2023 G7 Summit in Hiroshima, Tokyo, said the facility was part of a $300-million loan the US International Development Finance Corporation (DFC) had granted to Africa Data Centers (ADCs), Africa’s largest network of interconnected data facilities, to invest in Africa.

Context

Africa accounts for less than one per cent of available global data centre capacity despite being home to 17 per cent of the world’s population.

The investment is expected to lay the groundwork for a digital revolution in Africa by increasing access to cloud-based technologies, bring down the cost of the Internet, which facilitates greater access to women, and make the continent a more competitive destination for industry.

According to the US government, the investment was built on Vice-President Kamala Harris’ recent trip to Ghana.

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Response

In a tweet last Saturday, the Minister of Finance, Ken Ofori-Atta, said following the IMF deal, the US had led the way to signal renewed confidence in Ghana as an attractive investment destination.

“We welcome the announcement of a $300 million private capital investment through the Development Finance Corporation (@DFCgov) to build a first of its kind data centre in Ghana (#GhanaRising),” the Finance Minister stated.

It follows a similar tweet barely a month ago of a fruitful meeting the minister had with the team from DFC in Washington DC.

Other beneficiaries

The investment is part of a series of investments in infrastructure the US government is sponsoring in Africa.

President Biden also announced a series of new PGII investments to build transformative economic corridors and drive infrastructure investments that could boost and connect economic development across multiple countries and sectors.

Other countries that will benefit from projects are Sierra Leone, the Gambia, Angola, the Democratic Republic of Congo, and Tanzania, among other low-income, developing and frontier economies in Africa, Asia and South America.

The investment is under the Partnership for Global Infrastructure and Investment (PGII), which the G7 countries launched at their summit last year as a flagship infrastructure initiative to better respond to the global demand for high quality infrastructure financing in low-and middle-income countries.

Since the launch, the US alone has mobilised $30 billion through grants, federal financing and leveraging private sector investments towards PGII.

“Under PGII, the United States Government will work to construct data centres throughout Africa.

This week, DFC announced it is using its $300 million loan facility to Africa Data Centers (ADCs), Africa’s largest network of interconnected data facilities, to construct a first-of-its kind data center in Ghana,” Mr Biden said at the 2023 G7 Summit.

Private capital

Private sector executives of companies such as Citi, Global Infrastructure Partners, Japan Foreign Trade Council, and Nokia also attended the G7 meeting to reaffirm their commitment to opening a serious, sustainable channel for unlocking public and private capital for these projects in the developing world.

Together, they identified methods to further mobilise infrastructure investment, with a particular focus on leveraging private capital to maximise the project pipeline.

Background

Last year, the African Infrastructure Investment Managers (AIM) opened a 20-megawatt co-location data centre at Amrahia in the Adentan municipality in the Greater Accra Region.

Known as the Onix Data Centre Limited, the $48-million investment makes Ghana the host of the only tier-four data centre in West Africa.

The centre is the only African carrier-neutral co-location data centre outside South Africa.

AIM is founded by two market giants, Makaraide from Australia and Old Mutual from South Africa.

The latest data centre will make the country attractive to big ticket investors who rely on data and fast connectivity.

Other data centres operating in Ghana are PAIX and MainOne, with logistics real estate company, Agility, announcing plans to establish a 30MW to 150MW data centre in Tema.

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