By Thebe Mabanga
The eThekwini Municipality has clarified that it has approved only the principles governing a proposed data centre, and not the project itself.
This follows reports of a proposed $9.8 billion (about R160 billion) investment by the Korea South Power Consortium for a data centre in Amanzimtoti, south of Durban.
The municipality said council had agreed to enter into a Memorandum of Agreement (MoA), which sets out terms of engagement with the prospective investor, but does not constitute project approval.
“The MoA creates a structured framework for engagement between the Municipality and the prospective investor to assess the feasibility of the proposal,” the city said in a statement.
It added that such agreements are standard practice in the early stages of large-scale projects, as they enable information sharing and preliminary assessments.
The city noted that the specific companies that may ultimately undertake the investment have not yet been identified.
“The reference to the ‘Korea South Power Consortium’ reflects a collective of Korean energy and technology entities that have expressed interest in exploring the proposed investment,” the statement said.
Among the key issues still to be addressed are the proposed facility’s electricity and water requirements.
Data centres are known for intensive energy and water use to power high-speed processing and cooling systems.
“No final decisions have been made regarding the electricity requirements of the proposed facility or how electricity may be supplied,” the municipality said.
“Any figures currently circulating publicly, including specific megawatt estimates, should not be regarded as confirmed project specifications.”
Council has also not approved any municipal infrastructure commitments, subsidies, incentives or financial contributions.
“Council’s approval to enter the MoA does not include approval for any municipal infrastructure commitments, subsidies, incentives or financial contributions,” the city said, adding that infrastructure approvals would follow a separate process.
Concerns have also been raised about the environmental sensitivity of the proposed site.
The municipality said environmental, technical, financial and regulatory approvals would be required should the project move beyond the exploratory phase.
Council said it would also need to be satisfied that tangible economic benefits would accrue to local communities.
“Considerations relating to empowerment, local participation and wider socio-economic benefits have not yet been defined. These elements typically form part of detailed project structuring during later stages, should the project advance,” it said.
The municipality emphasised that its current approval is limited to signing the MoA and does not extend to technical, financial, environmental or regulatory authorisations.
Durban’s appeal as a potential data centre hub lies in its proximity to undersea cables that enable global connectivity.
The city already hosts a data centre owned by US-based Hurricane Electric on Oppenheimer Road in the city centre.
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