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Why are data centre investors flocking to Lagos’ coastline?

April 1, 2025

Why are data centre investors flocking to Lagos’ coastline? Simple. To get a slice of Lagos’ booming data center market—projected to reach 80 megawatts (MW) by 2027. Global investors are pouring capital into Victoria Island and the Lekki Peninsula, two of the city’s most affluent urban neighborhoods.

Thanks to its proximity to eight submarine internet cables, Lagos Island is positioned to become Africa’s second-largest data center hub, trailing behind Johannesburg’s 200MW capacity. But the scramble for Lagos’ coastline reveals the promise and pitfalls of betting on Africa’s fragmented data economy.

The closer a data center is to a submarine cable landing station (CLS), the faster data can travel, reducing delays. Coastal data centers are built near these landing stations to improve speed and efficiency. They also serve as backup hubs, keeping networks running even if inland connections go down, said Ayotunde Coker, CEO of Open Access Data Centre (OADC).

“It is the availability of infrastructure and also proximity to landing stations and typical site selection parameters that makes investors elect to build data centres in Victoria Island,” Coker told TechCabal.

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

Nigeria’s eight submarine cables—including Google’s Equiano and 2Africa—make landfall along the Lagos Island coastline, connecting to terrestrial fiber-optic networks for broader distribution.

Ten of Nigeria’s 16 data centers are already concentrated in Victoria Island, Lekki, and Eko Atlantic City, and operators are racing to add more capacity. Projects under construction include Equinix’s 20MW facility, Kasi’s 5MW center, Nxtra by Airtel’s 38MW data center, and Open Access Data Centre’s 24MW facility—all slated for completion by 2027.

These new data centers, along with ongoing developments across the country, will expand Nigeria’s total capacity from 64MW to approximately 200MW.

By bringing data processing closer to users, these facilities will reduce delays, enhancing the performance of cloud services, streaming, and online gaming. The increased capacity will also improve network reliability, minimizing downtime and ensuring more stable connectivity.

Power, water, and urbanisation

Investors are drawn not just by connectivity but by Lagos’ improving power infrastructure. As key urban hubs, Victoria Island and Lekki are designated “Band A” service areas, ensuring 20 to 24 hours of electricity daily—critical for data center operations.

“Power infrastructure in the Lekki Corridor today and in the future is more robust than other parts of Lagos,” said Wole Abu, managing director of Equinix West Africa.

Another reason for choosing coastal areas is access to water for cooling systems, which prevents overheating and maintains efficiency.

In 2023, data centers globally consumed an estimated 309 million gallons of water per day—enough to supply 3.3 million people—and this demand is expected to rise to 468 million gallons daily by 2030 as more AI-driven data centers emerge.

The increasing investment in Lagos’s data centers reflects a global urbanization wave. A recent Bank of America Institute study identifies urbanization, aging populations, and evolving consumer behavior as key drivers of digital infrastructure expansion.

The United Nations projects that by 2050, about 66% of the global population will live in cities, rising to 87% in developed nations, with Asia and Africa contributing 90% of this urban growth.

One of the ultra-urban areas, Eko Atlantic, is envisioned as a cutting-edge smart city with world-class infrastructure, high-rise buildings, luxury real estate, and advanced flood protection systems.

Though still under development, it has attracted major data center investments, hosting two hyperscale facilities—Africa Data Centres’ Tier III data center and Nxtra by Airtel.

For now, Lagos’ coastline remains the hottest ticket in town if investors can navigate its tide.

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