Raxio launches data center in Mozambique

Data center provider Raxio today announced the opening of its Raxio Mozambique (Raxio MZ1) facility on the outskirts of Maputo.

Raxio said Raxio MZ1 is the country's first Tier III uptime-certified, hyperscale-ready data center and will be foundational in supporting the country's growing digital economy and in helping meet the government's digital transformation agenda.

Robert Mullins, CEO of Raxio Group, sat down with Connecting Africa ahead of the launch and said the Mozambique investment is part of the group's strategy to open 1.5-to-3-megawatt capacity facilities across underserved markets in Africa.

"Mozambique is very similar to the draw in the other markets that we've targeted. They all fall into this tier two category of countries in Africa in terms of population size and conductivity, penetration etc. I think what's really attractive about Mozambique as well is its location, right in Maputo, and very close to South Africa. We have subsea cables, landing here in Maputo as well," Mullins explained.

The data center is located in Beluluane Industrial Park (MozParks), on the outskirts of Mozambique's capital Maputo.

"The flagship Raxio MZ1 facility is a hub of connectivity and digital exchange, with eight of the country's top telecom operators and connectivity providers already signed up," Mullins said.

With Maputo situated on the East African coast of the Indian Ocean, Raxio MZ1 is strategically located near three subsea cable landings, including the recent high-capacity 2Africa cable. This offers international connectivity and provides a redundant route for the broader Southern African market.

"I think it's an interesting alternative route and alternative link out of South Africa. If you take the Johannesburg-Maputo and Johannesburg-Durban triangle it makes a nice redundant route, in terms of international conductivity," he added.

Mullins said Mozambique falls into a strategic category where there's a severe lack of digital infrastructure, and Raxio believes growing that infrastructure is a fundamental pillar for the country's next phase of development and digital evolution.

"There's a lot going on from an economic perspective in Mozambique as well. It's been delayed for a few years, but the whole natural gas activity, which is driving a lot of foreign investment into the country. So, we see a rising tide overall in Mozambique," he said.

Raxio said the data center meets both primary and disaster recovery needs of its customers and benefits from the Park's robust power and connectivity infrastructure, ensuring a stable and highly connected operating environment for the facility.

Raxio's data center in Mozambique is the country's first Tier III uptime-certified, hyperscale-ready data center. (Source: Raxio)

Raxio Mozambique is fully equipped with "industry-best cooling technology", security standards, AC/DC power compatibility and redundancy in an "always-on" uptime environment. Customers will be able to cross-connect with local and international carriers and other customers in specially designed meet-me rooms.

Co-locating Raxio's facility allows customers to benefit from a "shared infrastructure" model, and substantially reduce their operational and capital costs while improving application performance and flexibility.

Combined with investments in terrestrial infrastructure, Raxio said the Mozambique data center will facilitate Internet traffic amongst content providers locally, attract regional and international service and content providers, and "make the Internet experience faster, more resilient, and more affordable for all digital users" in the region and Mozambique.

Mullins said one of Raxio's key strategies is to target markets that are reliant on renewable energy, and Mozambique was attractive because it is one of the cleanest power producers in Africa with 80% of Mozambique's electricity produced from renewables.

The local data center was built with sustainability practices in mind, from its energy-efficient design to environmentally conscious processes.

"Raxio's design and equipment choices are adapted to local environmental and climatic conditions, allowing Raxio's facility in Mozambique to reach Power Usage Efficiency (PUE) ratios unrivalled on the African continent," the launch statement added.

Raxio's growing African footprint

The Maputo launch is the latest in a series of data center launches, as Raxio continues to build a pan-African digital backbone of carrier-neutral facilities across the continent.

Raxio previously launched data centers in Uganda and Ethiopia and has a strong pipeline of builds ongoing in other countries.

Mullins confirmed that the data center in Côte d'Ivoire will go live in July, the Democratic Republic of Congo (DRC) facility in August, and the data center in Angola will open by the end of the year.

The group is also moving forward with plans for a data center in Tanzania and Mullins said the lease agreement for a plot of land was signed this week with construction expected to start in the next few months.

"Tanzania has proven to be extremely bureaucratic - when you look at the countries that we operate in a lot of them are. There was quite a lot of untangling to be done around the plot of land that we acquired there," he explained. "As soon as we get the build permit there, in the next month or so, we'll be able to pull the trigger, but it's still very much in the pipeline."

"It's a huge year for us and it's the fruit of many years of preparatory work and hard work by all the teams. So, we're very excited," he added.

Mullins said Raxio's strategy is to focus on underserved markets in Africa. In the short term, it is not targeting growth in bigger economies like South Africa, Nigeria or Kenya.

However, long term these could be of interest as the group aims to be "one of, if not the most dominant data center operator across the continent" but is choosing to do this via smaller markets, amassing capacity in a more fragmented way.

"We will get to 25 to 30 megawatts across multiple markets, rather than placing one bet of 30 megawatts on South Africa, for example, where there are a bunch of other people doing it at the moment," he explained.

"We will then see how those markets are developing and then use our skills and expertise, our market presence, our brand to possibly enter some of these other markets, potentially through mergers or acquisitions," he added.

Robert Mullins, CEO of Raxio Group, speaking at an event in Uganda in 2021. (Source: Raxio)

He said the group could look to expand into Asia or Latin America down the line if opportunities come up, but for now it has its hands fairly full in Africa.

"Raxio was founded by Roha, which is still our biggest shareholder and where I'm also a partner in that fund, and the premise of Roha is really to invest in Africa only and look at opportunities in the market which are underserved," Mullins added.

Mullins said its current operations across seven countries each have future phases built into the business plan.

"We build an initial phase of between half a megawatt and one and a half megawatts, depending on the country, and can grow to three or four megawatts, at those existing facilities. Beyond that, most of the plots that we've acquired more recently, we can go above that - we can basically replicate the same facility again, so we can go to six or seven megawatts on some of those plants," he explained.

He said each expansion will be in response to demand and uptake, but overall, the portfolio could grow on existing sites to up to 33 megawatts.

"Within the current business plan, there's still another three sites that are currently undergoing evaluation and selection. I would put my hand in the fire that at least one, probably two, of those would be in existing countries where we are already - so having second facilities in some of those countries, just because the demand is there and we already have the operation," he added.

Looking ahead, he said the company should have ten data centers in Africa by 2027, but it has the aspiration to build 15 to 20 facilities in the longer term, which would inevitably mean looking at new countries.

Funding Raxio's expansion

In October 2023, Raxio announced it had secured an additional $46 million in equity funding from existing shareholders Roha and Meridiam, with the funds earmarked for expansion initiatives.

In total, Raxio has raised about $120 million in equity funding and $110 million in a debt facility from Proparco and the Emerging Africa Infrastructure Fund (EAIF), with another $60 million additional debt available through that deal.

"We are actually quite close to finalizing that top-up, so adding another $60 million of debt into that existing facility, with a third lender. Linked to that there may be a quasi-equity component that comes in as well. So, we expect probably another $60 million to $100 million of funding to come in, in the relatively near future," Mullins told Connecting Africa.

CEO's exit strategy

In October 2023, Raxio also announced that Mullins would step down as CEO in the second half of 2024.

He told Connecting Africa that he believed the company had reached a level where it's time for some new blood in the leadership.

"I feel like the bulk of my work in terms of getting this baby off the ground has been done. So, I just think it's time for someone to come and take the reins and move along from here. I think we've done a great job of early commercialization across the portfolio, also with some international customers on board, so I think all the foundations are in place. I feel it's just the right time, after six years of very busy times and hard work, to hand over the reins to someone for the next phase," he explained.

He said he thinks there will be a fairly long transition phase once his successor is selected and he will still be involved in the company long term, in some shape or form, given his role at the shareholder level.

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*Top image source: benzoix on Freepik.

— Paula Gilbert, Editor, Connecting Africa