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In African countries. I think each data centers, smaller sites like we operate in Durban, those are starting to proliferate. It makes a lot of sense because you want the content to be as close to the end user, so they have an amazing experience. You want to be able to access content, video and get it straight away and consume it. I think from a cloud perspective, though, that becomes a bit more challenged in the rest of Africa just by way of economies of scale. It's large scale infrastructure,
and I think that's going to develop in hubs. So at the moment the major hub is South Africa, and then the two other hubs that are starting to merge, as is Nigeria and Kenya, but which is interesting because there are as we see with data centers elsewhere, power is a big debate and water is a big debate. why is that not happening? As these hubs are forming, the are two important debates and actually becoming even more topical as everyone becomes more aware of sustainability. I see this a lot of myths as well, so maybe the easy one to address is water because, you know, water use comes up quite often actually.
We use technology. So firstly we operate in a water scarce environments. South Africa's water scarce. We have large facilities in Cape Town. We, you know, came close to day zero. So we incorporate technology. It's called a mixture of free air cooling and a closed loop system. So we actually don't use water in the ongoing process. So actually if you take all our sites and aggregate our water use, we use probably 1/20 of the average golf course in America over the course of a year. So a bit of a myth with regards to water use, renewable energy that's probably more challenged. and there was a little bit in the
hands of our national utility, you know, they've done really well. So we now moved into a surplus position, but we've got a renewable energy target. we want to get to 100% renewable energy by 2035. I didn't get there, so I gave me the hands a little bit of Eskom. They, obviously we in emerging markets, 80% fossil fueled, they have a path to improve that. But we want to accelerate that. So we've invested 125 million, you know, in utility scale solar plant. So 120 megawatts. It's located about 100km outside of Johannesburg, and will be willing that power across Eskom's grid to our sites in Cape Town and Johannesburg. is that.
Do you see that being the models that we need to see in some of these other hubs, as you call it? I mean, it is a combination of private and public coordination? Yeah, I see that happening more and more. I mean, if you take Teraco, we don't just connect ourselves onto the network. We're actually investing in the grid as well. So we building substations, whether it's for the municipality, or for Eskom, will end up building, you know, the substations as well as, you know, the connections to our thoughts. So we are investing in the grid, you know, alongside them. And, you know, to the extent that they're able to provide us with an accelerated, you know, path, we'll do it ourselves.
Where does AI and higher compute come into the conversation? Because we've also been talking to quite a lot of people about AI data centers and more of them that are being rolled out. Is that something that Teraco is thinking about? And do you think maybe, the African continent is a bit early in that development? So I think, I'll differentiate our adoption to our data centers. I don't think the two need to necessarily go hand in hand, and I'll come back to that. But these large AI data centers that you're reading about, it's almost like weekly coming up in the news, large sites, hundreds of megawatts
or gigawatts being built in the US, in the Middle East, you know, and in China, the cost of electricity is obviously a huge factor. So the cost of electricity, there's like between $0.06 to $0.08 US cents. I don't see these big sites being developed in South Africa or actually on the African continent. I think it becomes a little bit more challenged to do that. What I do see and what we'd like to see coming into office facilities is the inference model. So those big gigawatt sizes, the training models, the learning models, once that's been refined into
an inference model, let's call it the production model that needs to be again, like content close to the end user, because you're throwing a whole lot of information at this model. and then you want to get an answer as quickly as possible and then act on it. That could be a prompt. It could be interactive with a bot, you want to get an answer super quickly. So we'd want to get those models into our sites. And if you add that up in aggregate, potentially, you know, it could be sizable demand. Why not AI data centers though? So our data centers are AI enabled. I do see AI coming. I just don't see these huge gigawatt factories coming to a US demand or the supply.
I just see it from a power perspective. It will be challenging to do a gigawatt sites, on the African continent at this point in time. So then what is needed to enable some of these to get to where you, see is maximum operation. So it's a function of two things. Power infrastructure, you know, gigawatts, a lot of power. And the second one is the price around. So again, you're competing against these markets with a middle East very low cost of electricity. Some of the US markets $0.06 to $0.08. you'll have to get the cost of electricity down to that price.
