Saudi Arabia unveils $18bn large-scale data center development plan

By Arya M Nair, Intern Reporter
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Saudi Data Center
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The Saudi Ministry of Communications and Information Technology (MCIT) has announced an $18 billion worth plan to develop a nationwide network of large-scale data centers.

Saudi Arabia is striving to become the region’s main data center hub, according to the ministry, and is working closely with the private sector, including local and international investors, to achieve this goal.

“We are enabling local champions to play a bigger role in the coming phase of Saudi Vision 2030, to increase the growth of hyper-scale co-location capacity data centers needed to attract other digital investments, such as cloud service providers, gaming publishers, and video streaming service operators,” said Mr. Bassam Al-Bassam, deputy minister for telecom and digital infrastructure at the MCIT.

Saudi FAS Holding Co., Gulf Data Hub and Al Moammar Information Systems (MIS) were announced as the first batch of key investment partners. The kingdom also exploring its options with tech giants, Amazon and Google as well as “all players ready to invest in Saudi Arabia and localize content and services ” according to sources. As of now, Saudi Telecom Company (STC), Mobily, Abunayyan, and Edarat are the main players in the Kingdom’s data center operations.

The ministry plans to speed up the development of data centers in the Kingdom in order to break the 1,300-megawatt barrier by 2030, with data center investments totaling more than $18 billion.

Earlier this week, MIS and Saudi Fransi Capital agreed to design, operate, and maintain data centers for a total of 1.2 billion. For the first 15 years, MIS will serve as the facility management for the data centers. Last month, the two sides signed a binding memorandum of understanding (MoU) to establish the fund, which may be worth up to 3.5 billion in the long run.

The coronavirus pandemic has reportedly raised the desire for businesses to digitalize their processes and embrace cloud-based services.

According to the ministry, it hopes to strengthen the country’s digital services sector in line with the National Transformation Program 2020 and Saudi Arabia’s 2030 goal, which tends to diversify its revenue sources in order to reduce its dependency on oil.

STC unveiled three huge data centers in Riyadh, Jeddah, and Madinah in December, with a total investment of $266.6 million. STC’s data center strategy is in its first phase, with plans for four more centers in the second phase, increasing total capacity to 40.8 MW.

Related: Etisalat to expand its services with new data center ‘SmartHub Kalba