The Ministry of Investment of the United Arab Emirates (UAE) has signed a Memorandum of Understanding (MoU) with the Ministry of Communications and Information Technology of Egypt to establish a framework for investments in digital infrastructure with a focus on data center projects in Egypt.
The agreement was signed recently by His Excellency Mohamed Hassan Alsuwaidi, Minister of Investment of the UAE, and His Excellency Dr. Amr Taalat, Minister of Communications and Information Technology of Egypt. According to a press release, “Data centers to be developed under this agreement can reach a total capacity of 1,000 megawatts.”
The move is in line with the ambitious digital transformation strategies envisioned as part of Egypt Vision 2030 and Digital Egypt. Moreover, Egypt and UAE have been historical trading partners.
According to H.E. Mohamed Hassan Alsuwaidi, Minister of Investment of the UAE, “This collaboration builds on the longstanding bilateral relations between the two nations, which are underpinned by the shared visions of our leadership on fostering economic impact. The signing of this agreement represents a significant milestone in driving innovation and growth, allowing us to contribute to the digitalization of Egypt as well as the nation’s preparedness for the future.”
H.E. Dr. Amr Taalat, Minister of Communications and Information Technology of Egypt, said, “The initial phase aims to achieve a capacity of 100 megawatts, with a future target of 1,000 megawatts. Additionally, proposed incentives to support further investment in data center projects will be discussed.”
Egypt’s Data Center Market
Egypt is one of the emerging DC markets in Africa. There are several international and regional players that have already set shop in the country. These include local operator GPX Global, with Telecom Egypt, Raya Data Center, Orange Egypt, and ECC Solutions.
In November 2023, Khazna Data Centers, that boasts of one of the largest networks of hyper-scale data centers in the Middle East and North Africa (MENA) region, announced that it had joined hands with the Benya Group, a leading digital and ICT infrastructure provider in Egypt and the MEA Region, to enter Egypt’s emerging data center market. The companies had first indicated that they were planning a step in this direction in May 2023, when they disclosed that they wanted to build the country’s first hyper-scale data center in Egypt’s Maadi Technology Park, backed by a combined investment totalling more than US$ 250 Million.
Meanwhile, Gulf Data Hub and Elsewedy Data Centers commiting are all set to invest a combined US$ 2.1 Billion across three locations in Egypt as part of a joint venture. GPX Global has also announced a 12MW expansionary plan for its Cairo 2 facility.
According to Arizton Advisory and Intelligence, “The market is aided by increased submarine cable connectivity, proximity to Europe, strong digitalization growth, adoption of advanced technologies, the establishment of industrial parks,” and that it will “witness investments of US$ 365 Million by 2028, growing at a Compounded Average Growth Rate (CAGR) of 14.57% during the forecast period (2023-2028).”
In its recent Data Centers in MENA Report, Knight Frank said, “With its strategic location, Egypt has become a hub for data centre investment, serving as a gateway between Europe, Africa, and the Middle East. The market’s growth has since been bolstered by increasing demand for cloud services, digital transformation, and the expansion of e-commerce and mobile technologies,” adding, “Egypt currently operates 13MW of live IT, alongside a pipeline with the capability of increasing the country’s offerings ten-fold.”