IEA warns AI-driven data centre growth could strain sub-Saharan Africa’s already limited power capacity and supply chains

AI is set to drive surging electricity demand from data centres, currently being rolled out in number across Africa, according to the International Energy Agency (IEA)

It poses a significant potential challenge for energy providers in sub-Saharan Africa, with the continent already lagging far behind other regions in terms of spare power capacity.

The IEA projects that electricity demand from data centres worldwide is set to more than double by 2030 to around 945 terawatt-hours (TWh), almost as much electricity as the whole of Japan uses today.

“AI is one of the biggest stories in the energy world today – but until now, policy makers and markets lacked the tools to fully understand the wide-ranging impacts,” said IEA executive director Fatih Birol, launching a new report.

The rise in global electricity demand is likely to put pressure not only on Africa’s scarce power resources, but even more so in developed regions.

“The effects will be particularly strong in some countries. For example, in the United States, data centres are on course to account for almost half of the growth in electricity demand; in Japan, more than half; and in Malaysia, as much as one-fifth.”

The report notes that Africa has the lowest energy consumption at less than 1 kWh of data centre electricity consumption per capita in 2024, rising to slightly less than 2 kWh per capita by the end of the decade.

However, there are strong differences within the region, with South Africa showing strong growth and per-capita consumption more than 15 times larger than the continental average in 2030, with an intensity higher than 25 kWh per capita.

Moreover, despite the strong increase, data centre electricity demand growth still accounts for less than 10 per cent of global electricity demand growth between 2024 and 2030, the IEA notes.

Other key drivers, such as industry output growth and electrification, the deployment of electric vehicles (EVs), and the adoption of air conditioning, lead the way.

However, it notes, while the absolute growth may appear smaller, data centres, unlike EVs, tend to concentrate in specific locations, making their integration into the grid potentially more challenging.

A diverse range of energy sources will be tapped to meet data centres’ rising electricity needs, according to the report – though renewables and natural gas are set to take the lead due to their cost-competitiveness and availability in key markets.

Across all cases, renewables play a pivotal role in meeting the growing electricity demand, the report notes, however, fossil fuels remain important for meeting the near-term surge in demand up to 2030.

The long-term growth of renewables to meet rising AI and data centre demand could put pressure on the resources needed to complete new clean projects, especially as more developed regions race to build additional capacity.

A major consideration related to the rapid growth of AI and data centres is the demand for critical minerals, the report notes.

Apart from bulk materials like steel and concrete, the construction of data centres requires sizeable amounts of several minerals and metals, such as copper, aluminium, silicon, gallium, rare earth elements and battery minerals.

Here, Africa might also face the task of shoring up its own supply chains, rather than as a supplier of raw materials and commodities to the rest of the world.

“Securing the supply of affordable and reliable power for data centres is at the heart of the challenge of energy for AI,” the report notes.

“In particular, the growing expansion of AI data centres has amplified the urgency of addressing power equipment supply chain constraints.”

Countries that want to benefit from the potential of AI, the report adds, need to quickly accelerate new investments in electricity generation and grids, improve the efficiency and flexibility of data centres, and strengthen the dialogue between policy makers, the tech sector and the energy industry.

EIB Global provides US$100mn to AXIAN Telecom for 4G and 5G broadband expansion in Madagascar and Tanzania. (Image source: Axian Telecom)

The European Investment Bank (EIB Global) has unveiled a US$100mn financing initiative for AXIAN Telecom to accelerate the development of mobile broadband infrastructure in Madagascar and Tanzania

The investment will bolster 4G network expansion and further the rollout of 5G technology in both countries.

This initiative, part of the European Union’s Global Gateway strategy and backed by a European Commission budgetary guarantee, is designed to improve access to high-speed internet, foster inclusive digital growth, and support sustainable development. The project also aims to narrow the digital divide in Africa and other emerging markets.

AXIAN Telecom, a major pan-African telecom provider with operations across nine Sub-Saharan African nations, currently serves over 44 million subscribers. Its most significant mobile and fixed-line networks are based in Tanzania, Madagascar, Senegal, Togo, and Comoros. Under the Yas brand, the company operates in both Tanzania and Madagascar. The EIB financing will allocate US$60mn to Tanzania and US$40 million to Madagascar.

AXIAN Telecom CEO Hassan Jaber remarked, “The US$ 100mn EIB Global financing will help us expand mobile phone infrastructure in Madagascar and Tanzania and benefit millions of people. This new large-scale network investment will pave the way for socio-economic growth, digital inclusion, and better opportunities.”

EIB vice-president Ambroise Fayolle added, “Digital connectivity opens doors for education, business, healthcare and social inclusion. This new investment demonstrates the EIB’s commitment to empowering communities, fostering sustainable development, and driving positive change through enhanced access to affordable high-speed communications.”

The project also supports the United Nations Sustainable Development Goals (SDGs) through the creation of energy-efficient and resilient digital infrastructure. It is expected to contribute to long-term economic growth, job creation, and greater digital access for remote and underserved communities. EIB Global sees this as a way to promote e-commerce, innovation, and knowledge-sharing.

European Union officials have also expressed strong support for the initiative and its transformative potential for local economies.

Deputy head of the EU delegation to Madagascar and the Union of the Comoros, Laurent d’Ersu, said, “This commitment from the EU through the EIB further demonstrates, in difficult times, our desire to contribute to the sustainable development of Madagascar through private investments in the formal sector and thereby generate growth and open up opportunities for all. This investment will enhance mobile broadband connectivity and bring vital opportunities for economic and social growth to all corners of Madagascar. The expansion of 4G and the introduction of 5G in a context of fair competition between telecommunication operators will be key drivers of digital inclusion, supporting education, innovation, and the creation of new jobs.”

EIB Global continues to play a vital role in financing telecom and digital infrastructure projects across Africa. This latest investment is in line with the EU’s Digital4Development (D4D) initiative and the broader Global Gateway strategy, which aims to mobilise up to €150 billion by 2030 for the development of key infrastructure across Africa. Through collaboration with telecom providers, local authorities, and national governments, EIB Global aims to foster a more inclusive and connected digital future.