Data centers have undergone a radical transformation in recent years. Today, they are one of the most important pillars of the digital economy. The development of artificial intelligence and related technologies means that technology companies need ever-more server space and ever-greater energy supplies. In order to capitalize on this opportunity, countries are looking to make a lot of money from it.

This trend is also visible in Africa, and South Africa is perhaps the best example. The country is already the continent’s most important data center market, with Johannesburg and Cape Town are attracting both – infrastructure providers and global technology companies.

However, the development of data centers is not just about business. It also comes with costs—not only strictly financial ones—that potential investors and governments must consider.
Enormous energy demand, the amount of water needed to cool servers, and the cost of expanding infrastructure to support new investments are just some of the critical issues South Africa must now confront, as a country with limited investment resources as well as limited access to water and energy.

Now, the South African Human Rights Commission (SAHRC) has also responded to this challenge.

 

Data centers and human rights

In an official statement, the SAHRC invited operators, investors, experts, civil society organizations, researchers, regulators, and government agencies to share their views on the impact of data center development on human rights.

The Commission’s field of interest is broad. It includes, among other things, energy and water consumption, environmental and climate impacts, land use, the participation of local communities in decision-making processes, investment transparency, data protection, and corporate accountability for the impact of their activities on human rights.

The SAHRC does not consider data centers to be a problem in themselves. In statement, the Commission acknowledges that data centers support the development of digital infrastructure, which can contribute to economic growth, digital transformation, and the country’s preparations for the development of AI. At the same time, it emphasizes the importance of responsible infrastructure expansion that takes local communities into account.

Business invests in efficiency

Data center operators themselves have also commented on the issue. As they point out, investment efficiency is a crucial factor.

Teraco is one of the largest data center infrastructure operators in South Africa. According to data published by the company, its data centers achieved an average annual PUE (Power Usage Effectiveness) of 1.43 in 2025. The WUE (Water Usage Effectiveness) ratio—that is, water consumption per unit of IT energy—stood at 0.03 liters per kWh. The company also reported that in 2025, its facilities consumed a total of 31,801 kiloliters of water, while reducing their dependence on municipal water by 10.8 percent.

At the same time, Teraco is developing its own renewable energy infrastructure. The company is building a 120 MW photovoltaic plant and has a program to purchase energy from wind farms. Its goal is to cover 50 percent of its energy consumption with clean sources by 2027 and 100 percent by 2035.

If this trend were sustained across the sector, or if similar standards were mandated by regulations, larger data centers would not necessarily result in proportionally greater resource consumption. The use of more efficient cooling and energy management systems could help investors expand data centers without placing additional pressure on the environment.

 

Will large data centers change the RPA infrastructure?

The issues raised by experts suggest that even a highly efficient facility can have a significant impact on local infrastructure if its capacity power is high.

In February, the „Daily Maverick” reported that planned data center expansion in South Africa could increase the country’s energy demand in this sector by approximately 1,000 MW (by comparison, the current total IT load of commercial data centers in South Africa is estimated at approximately 350 MW to 450 MW).

In Cape Town, the issue is particularly interesting because the city is already actively looking for new energy sources on its own to reduce its dependence on the state-owned energy company Eskom. In late August 2026, city officials signed the first contracts to purchase a total of 70 MW of energy from private renewable energy facilities as part of a program that is ultimately intended to cover up to 200 MW.

 

Community organizations want more transparency

Organizations such as Open Secrets and partners in the human rights sector are drawing attention to the need for greater disclosure of information regarding the impact of data centers on energy, water, land, and local communities. In their submissions to the Commission, they call for the creation of a national registry of existing and planned data centers and greater transparency regarding resource consumption data.

As they argue, the community needs to know what is being built in their neighbourhood, how much pressure it will place on local infrastructure, and what natural resources it will use. The government, meanwhile, must strike a balance between attracting capital and protecting public goods.

 

It’s not about stopping AI

South Africa has a real opportunity to capitalize on the AI boom. Data centers can attract investment, support the development of cloud computing, fintech, and local digital services, and strengthen the country’s position as Africa’s technology hub. But for this to happen, the investment process will require responsible policies that prioritize the environment and people.

The SAHRC has pointed out the need to consider whether current regulations and control mechanisms are appropriate for this rapidly growing sector. The Commission has announced that the opinions it collects will be used to advance the dialogue and, if necessary, make recommendations to Parliament and government agencies.

 

What about the other African countries?

Other African countries will soon face the same challenges as South Africa is currently experiencing. The list of major economies also looking to invest in data centers includes Nigeria, Egypt, and Kenya, among others.

If the continent wants to attract AI investments, it will need data centers. These, in turn, require energy, transmission networks, water, and access to infrastructure. For the sector, this could mark the beginning of a new era. It will no longer be enough to build a data center quickly and cheaply. It will be necessary to demonstrate that these facilities can be built in a way that is acceptable to the city, the state, and the community providing the necessary utilities—while at the same time protecting the natural environment.

For South Africa, this is one of the most important tests of its national ambition to become the digital gateway to Africa.