South Africa Is Approving AI's Infrastructure Before Asking What It Will Cost

The fear that data centres will drain our dams is mostly misplaced; approving them before their true demands are disclosed is the real failure.

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A data centre is an abstraction until it needs water and power from the same systems that supply your home. That collision reached Cape Town this month, when the city’s Municipal Planning Tribunal voted four to one to approve land use for two hyperscale data centres near the airport, a development of more than 120,000 square metres drawing around 174 megawatts once operational. The approval was granted even though the application disclosed neither how much water the facilities would use nor how their power would be supplied. For South African boards, investors and municipalities, the physical footprint of artificial intelligence has become a governance question, and it is being answered in the wrong order.

CONTEXT AND BACKGROUND

The objection was pointed. The Legal Resources Centre, acting for the Housing Assembly and the tech-justice group Foxglove, argued that a facility of this scale could not be waved through as a routine rezoning without disclosure of its water and energy demands. Their estimate, based on traditional cooling, put a 174 megawatt site at as much as 4.4 billion litres of water a year and electricity equal to about 130,000 homes, while the developer, Equinix, replied that such detail would follow at the site development plan stage. One tribunal member refused to support an application whose water and power needs he could not see, though the majority approved it anyway. The setting sharpened the alarm, since this is a city that watched its taps edge toward Day Zero in 2018, in a country that receives roughly half the world’s average rainfall and has already allocated most of its water.

INSIGHT AND ANALYSIS

The water fear, though, is largely the wrong one. Legal analysts point out that the newest facilities use sealed closed-loop cooling, in which the coolant circulates continuously and is, for practical purposes, never discharged, unlike the evaporative towers draining aquifers in Arizona; a 2025 Carnegie Mellon University Africa study found that South Africa uses less water per unit of computation than even the United States average, and the continent holds under one per cent of global data centre capacity. The binding constraint here is not water but power, and the numbers are moving fast.

Global data centre electricity demand rose seventeen per cent in a single year and is set to double by 2030, with the swelling pipeline of projects already straining planning and regulatory systems. A continuous 174 megawatt load is close to half of the entire continent’s current installed data centre capacity. The questions that actually matter are therefore power, jobs, and how long these assets last before they must be retired, none of which a rezoning hearing was equipped to answer.

IMPLICATIONS

For South African leaders this lands at a delicate moment. The country has just passed a full year without load-shedding, with a modest winter surplus, yet electricity generation is contracting, energy-intensive plants are closing and tariffs are climbing well above inflation, so a wave of concentrated, always-on demand is a deliberate allocation choice rather than spare capacity to give away. The deeper issue is coherence. South Africa’s environmental laws already reach these projects through several statutes governing water use, air quality and waste, but no single framework tells a developer, a regulator or a community how the pieces fit, which is how a hyperscale facility comes to be approved as though it were a warehouse.

I have previously written about this, in a piece on the hidden environmental cost of the country’s data centre boom, arguing that a coal-heavy grid makes every megawatt a server farm draws carry a heavier carbon burden, that Eskom and some municipalities have refused to disclose consumption figures, and that South Africa needs mandatory reporting and binding efficiency standards before the sector locks in its footprint. That gap is briefly open for repair, since the South African Human Rights Commission has called for public submissions on data centres and human rights. Boards that build, host or rely on this infrastructure have both an interest and a duty to shape the standard before it sets.

CLOSING TAKEAWAY

The lesson is not that South Africa should turn the investment away. Billions are committed, the digital capability is real, and the water panic that dominates the headlines is mostly misplaced. The lesson is about sequence. Infrastructure that runs continuously for decades, draws power equal to a small town and will one day have to be decommissioned should not be approved before anyone can say how much water it needs, where its electricity will come from, how many people it will employ, or what becomes of it at the end of its life. These are answerable questions. Insisting on the answers before the concrete sets, rather than after, is the whole of the governance task, and it is one that boards and municipalities can still get right.

Johan Steyn is a prominent AI thought leader, speaker, and author with a deep understanding of artificial intelligence’s impact on business and society. He is passionate about ethical AI development and its role in shaping a better future. Find out more about Johan’s work at https://www.aiforbusiness.net