Cooling The Hype: The Real Questions Behind South Africa’s Data Centre Boom

Hollywood often reaches for spectacle when imagining the digital age: in the 2015 film, Mission: Impossible – Rogue Nation, audiences catch a glimpse of a futuristic data centre submerged off the coast of Morocco, an underwater vault humming with the world’s secrets. The image captures a very real, and growing, public anxiety about the environmental footprint of the infrastructure that powers artificial intelligence (“AI”). But with all the hype, both negative and positive, we need to begin by grounding the impacts in fact rather than fiction.

Africa accounts for less than 1% of global data centre capacity. The United States, by contrast, hosts close to 45%. The scale of water consumption associated with AI infrastructure on our continent is nowhere near what has made headlines in Arizona or Iowa. The real question is not whether South Africa faces an American-style data centre water crisis today, but rather, whether we can anticipate tomorrow’s pressures early enough to avoid one, and whether we can build a different model, one where digital growth and resource resilience develop in tandem, rather than in competition.

The South African Human Rights Commission (“SAHRC”) is asking the same questions. On 22 May 2026 it called for written submissions from all interested stakeholders, communities, industry, regulators, academics and civil society, on data centres and human rights in South Africa. The deadline is 30 July 2026.

It was never really about the water

Here is the first surprise for anyone expecting a story about thirsty machines draining our dams. In South Africa, the water use of modern data centres is remarkably low, with engineering being the chief factor. The newest facilities rely on closed-loop cooling systems, in which the same coolant circulates continuously through the servers and is not routinely replaced or discharged. Operators we spoke to confirmed that the coolant in these sealed systems is, for practical purposes, never swapped out. This is a world away from the older evaporative cooling towers that consume millions of litres of fresh water a day in hotter, drier parts of the United States.

Independent research bears this out. A 2025 Carnegie Mellon University Africa study, the first of its kind to model water efficiency for data centres across 41 African countries, found that nine of eleven representative countries consume less water per unit of AI computation than the global average, with South Africa and Morocco using even less water than the United States average.

Take Teraco, the continent’s largest colocation operator. Teraco runs what is essentially a “data centre hotel,” providing the physical facility, power and cooling within which the global cloud giants, the likes of Amazon Web Services and Microsoft, house their own equipment. Its water footprint is low, and, more importantly, it measures and reports on its resource use. That combination, low consumption plus transparency, is exactly what a mature market should look like.

So, if water is not the crisis we feared, what should we actually be worried about? At a panel discussion during the Pan Africa Data Centres Exhibition & Conference, in Johannesburg on 24 June 2026, titled “The importance of water in future data centres, considering the global shortage of fresh water is a reality”, a more uncomfortable and more interesting set of questions surfaced:

• the general impact on the environment and, above all, on communities;
• whether these facilities will genuinely create jobs; and
• a question no one in the industry could yet answer, namely how long a data centre actually lasts.

The lifespan of these assets, we were told, is currently one of the biggest unknowns in the sector, which has real implications for how we think about decommissioning, retrofitting and long-term accountability for the environment and communities.

South African environmental laws are already well equipped

From a regulatory standpoint, the good news is that South Africa is not starting from scratch. Although data centres are not expressly mentioned or regulated as a distinct category, South African environmental laws already capture their associated impacts that arise from the development, construction and operation of data centres.

Under the National Environmental Management Act, 1998, (“NEMA”), a range of listed activities, from the construction of facilities and associated infrastructure to bulk water abstraction and the installation of fuel storage for backup generators, may not commence without an environmental authorisation. Depending on the activities triggered, this means either a basic assessment or the more intensive scoping and environmental impact assessment reporting process under the Environmental Impact Assessment Regulations, 2014, will be undertaken, each with its own public participation requirements.

Water use is separately regulated. The National Water Act, 1998, defines “water use” broadly in section 21 to include not only taking and storing water, but also disposing of water that has been heated in an industrial or power-generation process, precisely the kind of thermal discharge a cooling system can generate. Section 22 makes clear that, subject to limited exceptions, such uses require a water use licence from the Department of Water and Sanitation.

Backup diesel generators, a near-universal feature of data centres, bring the National Environmental Management: Air Quality Act, 2004, and its emissions-licensing regime into play, while the National Environmental Management: Waste Act, 2008, governs waste streams.

In short, the framework exists. What is missing is coherence. A developer today must navigate and coordinate authorisations across several statutes and authorities, each with its own timelines, definitions and interpretations, with no single instrument explaining how these requirements fit together for this particular type of development. This is where a dedicated guidance document, similar to those that already exists to steer renewable energy developers, would make a real difference.

The need is more pressing given that the Department of Forestry, Fisheries and the Environment (“DFFE”) is proposing a move towards a more risk-based approach to environmental impact assessment. NEMA already allows the Minister, under a risk-averse and cautious approach, to identify activities that may be excluded from full authorisation provided they comply with prescribed norms or standards, and to grant exemptions in appropriate cases. A risk-based regime could reduce the regulatory burden on genuinely low-impact facilities, for example through an application for exemption, but only if there is clear guidance on how to distinguish a low-impact data centre from a high-impact one in the first place. A guideline would streamline the correct approach and give both regulators and developers certainty about the impacts of concern: water abstraction and thermal discharge, energy demand and its emissions, diesel storage and air quality, noise, and the cumulative effect of clustering several facilities in one area.

The submissions called for by the SAHRC provides a rare opportunity to shape the framework before the concrete sets, and industry participants in particular should not sit it out. Bodies such as the Digital Council of South Africa are already preparing representations on behalf of their members.

We will share more next week regarding the impacts of data centres. Our team is ready to assist operators, developers and other stakeholders in preparing and lodging their submissions before the deadline.

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