Eskom has opened discussions with major global cloud and artificial intelligence operators, including Amazon, Microsoft and Google, to supply electricity to large data centres as a way of monetising roughly 6 GW of spare generation capacity during peak periods, the utility said.
Surplus power meets data-centre demand
The engagement follows a sustained improvement in South Africa’s electricity supply. Eskom’s board chairperson, Mteto Nyati, framed the opportunity as a way to move “from load shedding to surplus power” and to convert unused capacity into economic growth.
“From load shedding to surplus power, and now engaging Amazon, Microsoft and Google on data centre demand. South Africa’s AI and data centre opportunity is real. We have the power. The question is whether we turn surplus into sustainable growth,” Mteto Nyati said in a post on X.
Industry estimates cited by the Financial Times and reported by Eskom indicate data-centre investment into South Africa could exceed R50 billion over the next three years. The country already hosts about 70% of Africa’s data centres and is widely regarded as the continent’s leading digital infrastructure market.
Scale and existing commitments
Market forecasts also suggest the local data-centre sector may double in size and surpass US$5 billion by 2031 as cloud adoption and AI workloads grow and as businesses demand more local data storage.
Specific corporate commitments are already on record. Amazon Web Services launched a Cape Town cloud region in 2020 and has signalled continued investment plans. Reported figures include a further planned AWS investment of R30.4 billion in South African cloud infrastructure by 2029. Amazon has also commissioned a 10 MW solar plant in the Northern Cape to help meet its power needs and reduce reliance on the grid.
| Item | Figure |
|---|---|
| Spare Eskom capacity (peak) | 6 GW |
| Projected data-centre investment (next 3 years) | R50 billion |
| Local data-centre market by 2031 | US$5 billion+ |
| AWS planned investment by 2029 | R30.4 billion |
Why data centres matter to the grid
- Large data centres provide steady, high-volume electricity demand that can absorb surplus baseload power.
- Hosting cloud and AI infrastructure locally keeps data sovereignty, reduces latency and supports local digital ecosystems.
- Investment in data centres often brings associated infrastructure spending and skills development.
For Eskom, attracting hyperscale customers would create predictable revenue streams and improve utilisation of existing generation assets. For global operators, South Africa offers a relatively mature data-centre ecosystem and favourable positioning to serve the rest of the continent.
Trade-offs remain. Large data centres demand continuous, high-quality power. They can require on-site redundancy, backup generation and substantial water and land resources. Some operators are already mitigating grid risk with dedicated renewable projects, as illustrated by Amazon’s solar plant in the Northern Cape.
It is not yet clear whether negotiations with the three technology companies will result in binding off-take agreements. Eskom’s public statement frames the effort as exploratory and as part of a broader strategy to translate improved supply into economic opportunity.
Observers will be watching several developments closely: whether firm power purchase agreements (PPAs) are concluded; how Eskom and government balance industrial demand with other domestic needs; and what regulatory or fiscal incentives might be offered to lure hyperscalers. Any major deals could accelerate further data-centre investment and strengthen South Africa’s position as a continental digital hub.
Details on potential project sizes, timelines and the role of renewable generation in proposed data-centre power mixes were not disclosed in Eskom’s announcement. Eskom and the companies named have not released formal confirmations of contracts at this stage.
