• Nigeria has 21 operational data centres as of February 2026, with capacity expanding rapidly as firms such as Chams Holding Company Plc scale into AI and infrastructure services.
• Grid reliability constraints, with average available generation around 5,000–6,000 MW against over 13,000 MW installed capacity, are increasing reliance on captive gas and hybrid solar solutions.
• Rising investment in data infrastructure is accelerating private power generation, renewable integration, and distributed energy development.

Nigeria’s fast-expanding data centre market, now 21 operational facilities with over 30 MW capacity, is emerging as both a pillar of the country’s digital economy and a stress test for its fragile electricity grid. As of February 2026, there are 21 operational data centres nationwide with combined installed IT capacity exceeding 30 MW.

According to the Nigeria Data Center Market Investment Analysis and Growth Opportunities 2026–2031 report by Research and Markets, the sector is projected to grow from approximately $374 million in 2026 to $782.82 million by 2031, reflecting strong demand for cloud computing, enterprise IT services, digital payments, and artificial intelligence infrastructure.

Leading operators include MainOne, Rack Centre, and 21st Century Technologies, alongside new investments from ChamsCorp, a subsidiary established to focus on data centre infrastructure, AI systems, and intelligent enterprise solutions. Market expansion is supported by rising internet penetration, estimated at roughly 64% of the population in 2025, increasing smartphone usage, 4G and early 5G rollouts, and data localisation requirements that encourage domestic hosting of digital services.

Industry projections indicate that Nigeria’s IT load capacity could exceed 300 MW by 2030 as hyperscale cloud providers and enterprise clients seek lower latency and in-country data processing. Subsea cable landings along the Lagos coast have strengthened international connectivity, positioning the city as the country’s primary data centre hub.

The expansion, however, is occurring against structural weaknesses in Nigeria’s electricity supply. Although installed generation capacity is estimated at more than 13,000 MW, average available generation fluctuates between 5,000 and 6,000 MW, reflecting grid reliability of roughly 40–45%. Voltage instability and periodic system collapses require data centre operators to maintain continuous backup through diesel generators and uninterruptible power supply systems to meet uptime standards exceeding 99.9%.

Energy costs account for one of the largest components of operating expenditure. Self-generated diesel power can cost between $0.28 and $0.33 per kilowatt-hour, significantly higher than grid tariffs or gas-based generation. Fuel price volatility and generator maintenance further increase total cost of ownership, influencing facility design and location decisions.

In response, operators are investing in captive and hybrid power systems. Rack Centre has adopted gas-fired generation combined with solar integration to reduce diesel dependence and improve efficiency. Across the sector, developers are deploying gas turbines, battery storage systems, and solar arrays to ensure continuous operations while lowering emissions intensity.

Nigeria’s substantial natural gas reserves, estimated at more than 200 trillion cubic feet, and high solar irradiation levels provide a resource base for distributed power generation tailored to data centre clusters. Recent regulatory frameworks by the Federal government supporting mini-grids and renewable integration aim to expand private sector participation in electricity generation and improve supply reliability for industrial users.

For investors and policymakers, the data centre market in a country like Nigeria represents both a stress test and a catalyst for reform. Rising demand for secure, low-latency digital infrastructure is increasing private investment in power generation capacity, grid resilience, and renewable deployment. As digital services scale across finance, telecommunications, and enterprise sectors, the data shows that sustained growth in data infrastructure will remain closely linked to improvements in Nigeria’s electricity system.

Cynthia Ebot Takang