Amazon to invest R30 billion in South Africa

 ·13 Apr 2023

Amazon’s cloud service AWS has announced its plans to invest R30.4 billion in its cloud infrastructure in South Africa by 2029.

The group published a new economic impact study (EIS) which outlined the group’s investment in its AWS Africa (Cape Town) Region since 2018, and projected forecast of investment to construct, operate, and maintain its cloud infrastructure in the country.

In total, AWS estimates it will invest R6 billion between 2018-2029.

The report indicates AWS’s investment from 2018-2029 will contribute an estimated R80 billion to the gross domestic product (GDP) of South Africa, and support an estimated average of more than 5,700 full-time equivalent (FTE) jobs at local South African businesses on an annual basis.

“AWS had long been committed to South Africa, and this infrastructure investment adds to our ongoing local story, where one of our foundational capabilities – Amazon Elastic Compute Cloud (Amazon EC2) – was developed by engineers in Cape Town back in 2006,” said Amrote Abdella, General Manager, AWS Sub Saharan Africa.

“This report illustrates our ongoing commitment to invest in South Africa and support demand for our world-class technology from customers here and around the world.”

Amazon said that its investment has already had a ripple effect on numerous local businesses, and has helped establish training and skilling programs for the local workforce, supported community engagement through various initiatives, and created sustainability initiatives across the country.

From 2018 through 2022, AWS invested R15.6 billion, which includes all cash expenses directly attributable to the AWS Africa Region, such as imports of highly specialized and proprietary equipment and software, and in-country spending.

This has resulted in an estimated R12 billion in local GDP contributed by this AWS Region.

Local spending includes capital expenditures on construction labour, materials, and services, as well as recurring operating expenditures on employee and contractor compensation, utility fees, and facilities costs.

AWS investment supports jobs at local vendors in the South African data centre supply chain, including telecommunications, nonresidential construction, electricity generation, facilities maintenance, and data centre operations.

The group said that it also works with higher education institutions in South Africa, including Durban University of Technology, Stellenbosch University, and the University of Cape Town to help prepare the country’s future workforce.

“Programs like AWS Academy, AWS Educate, and AWS re/Start help with job training across the country. Moreover, AWS is committed to supporting the digital literacy goals set out in South Africa’s ‘National Digital and Future Skills Strategy’ through innovative workforce development programs,” it said.

Amazon said that is also committed to becoming a more sustainable business and reaching net-zero carbon across its operations by 2040. To this end, it has become the world’s largest corporate purchaser of renewable energy and is on path to powering its operations with 100% renewable energy by 2025, five years ahead of its original target.

In South Africa, AWS launched its first operational solar project in 2021, which contributes renewable energy to the electricity grid.

The solar plant is expected to generate up to 28,000 megawatt-hours (MWh) of renewable energy per year, which equals the annual average household electricity consumption of over 8,000 South African homes. The solar plant is majority-owned by black women and operated by a fully South African-owned company.

AWS in South Africa

The AWS Africa (Cape Town) Region adds to the company’s ongoing investment in South Africa. In 2015, AWS opened an office in Johannesburg, South Africa. In 2022, AWS opened a larger office in Johannesburg to support growing customer demand.

In 2017, the Amazon global network expanded into Africa through AWS Direct Connect. In 2018, AWS established its first cloud infrastructure on the African continent, launching Amazon CloudFront locations in Johannesburg and Cape Town, to help organizations securely deliver content with low latency at high transfer speeds.

In 2020, the AWS Africa (Cape Town) Region was launched with three Availability Zones. An AWS Region is a physical location comprising multiple, isolated, and physically separate Availability Zones, which in turn form clusters of logically connected data centre infrastructure.

Availability Zones may be located up to 100 kilometres apart to protect against natural and human-made disasters that could affect the data centres. The AWS Cape Town Region enables even more developers, startups, and enterprises, as well as government, education, and nonprofit organizations to run their applications and serve end users from data centres located in South Africa.

Aside from AWS, Amazon is reportedly still looking to open up a retail marketplace in South Africa, with the group said to be targeting a launch before the end of the year.

Read: Amazon pushes back launch of South African marketplace

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