Watch â Inside Cape Townâs data hub deal

This story has significance for readers across Africa and beyond.

A golf course became a R3-billion logistics hub. Now itâs set to house two of Cape Townâs biggest data centres. Daily Maverickâs Lindsey Schutters reports on a R100 land swap, a data centre reclassified as a âwarehouseâ, and the environmental assessment thatâs been pushed down the road.

Reporting by: Lindsey Schutters

Filmed by: Joel Seboa

Edited by: Joel Seboa

Produced by: Emilie Gambade

Creative input by: Malibongwe Tyilo

Sub-edited by: Kim Maxwell

Support journalism that protects democracy. Become a Maverick Insider.

***

Right now, thereâs an OpenAI data centre being built near Sydney in Australia. Last week the developers decided to abandon their liquid cooling ambitions, for air cooling. Itâs going to cost more on the electricity bill of an already colossal 612 megawatt AI node, but itâs a small price to pay to dodge the near universal backlash from communities all around the world who have finally decided to take a stand.

Every industrial revolution is bad for the environment in some way, but they do bring benefits. Today, the factories of the Fourth Industrial Revolution arenât pumping smoke into the sky they are pumping unthinkable amounts of data into the cloud.

In 1956, the King David Golf Club (the one that used to be near the airport) was built to give Cape Townâs growing Tygerberg community a place to swing their clubs. But golf courses are incredibly thirsty.

At the height of Cape Townâs Day Zero fears, a golf course could slurp up to three million litres of water a day. Thatâs enough to support 60,000 Capetonians under severe water restrictions.

So when the clubâs membership collapsed in the mid-2010s, developers stepped in. The fairways were leased for 99 years and transformed into a R3-billion logistics gateway called King Air Industria.

The golf course merged with Mowbray and moved out there.

And now, the global digital infrastructure firm Equinix is moving in, setting up two massive hyperscale data centres. We do not know what cooling technology they will use, but industry insiders are talking about closed loop, air cooled systems.

But while these tech behemoths might not guzzle as much water as the luscious fairways used to ... they are exceptionally hungry for power.

On July 14th, Cape Town's Municipal Planning Tribunal â yes, the one my colleague Kevin Bloom is exposing â approved the land-use rights for Equinix by a 4-to-1 majority, overriding objections from community and legal groups ⦠and even one of their own.

But the real tea isn't just the approval. Itâs the commercial deal between the City of Cape Town, the developers, and Equinix.

Itâs an elegantly executed, multilayered transaction that ties land-use rezoning directly to the municipal grid. Itâs also the closest look that I have ever had at the underlying wheeling and dealing that get these projects over the line.

The physical core of the electricity deal is a land-swap agreement between the City of Cape Town and the developer, authorised by Geordin Hill-Lewis via a Mayoral Committee (Mayco) Round-Robin process on 25 May 2026.

The City transferred a tiny 280-square-metre property to the developer for a nominal fee of R100 (including VAT). In exchange, the developer gratuitously ceded a significantly larger piece of land, almost 3,000 square metres, back to the City.

Why? Because they needed a clean cadastral boundary to build a massive, 240 megawatt electrical switching station.

A 160 MVA grid connection is a massive electrical load. To put it in perspective, that is comparable to the demand of an entire small municipality, or around 15,000 households.

To secure this, the developer paid shared network charges of about R33-million directly to the City.

This switching station serves a dual purpose. At least 160 MVA is dedicated purely to powering Equinixâs two data centres. The remaining 80 MVA goes directly into the Cityâs primary network, strengthening the local grid.

Eskomâs Philippi and Erica transmission stations will route the physical power, with essential upgrades projected for completion by August 2028 â Eskomâs Erica station is budgeted and currently undergoing the renovations.

So far, it looks like a win-win.

To secure these rights without starting a completely new, heavy-industrial permit process from scratch, they carved out existing approved floor space for industrial and warehousing use, and combined it to create a brand-new land-use category: âData Centreâ.

To ease the regulatory path, the developer relied on an administrative interpretation that classified the data centre as ... a warehouse.

Under Cape Townâs old planning guidelines, a data centre was interpreted as â I am not joking â âthe storage of computers and dataâ. So, technically, yes, warehousing.

But as the Legal Resources Centre rightly argues, treating a 160 MVA, high-intensity digital processing plant as a standard physical warehouse is a regulatory fiction. A warehouse is a low-intensity space with minimal resource consumption.

A hyperscale data centre operates 24/7 and draws massive public resources. Its environmental footprint is entirely different.

Since the original July 2019 approval, this development has undergone at least seven rounds of planning and condition amendments.

Step by step, over seven years, the developer managed to dodge a full assessment of the projectâs cumulative impact on local resources.

But here is the real catch, and the part that gives me hope for unlocking further mysteries of this heavily guarded industry. A 160 MVA data centre requires heavy industrial backup generation to maintain that elusive âfive-ninesâ uptime guarantee.

It is going to need diesel generators to match the power draw, and fuel reserves.

Under national environmental laws, any non-renewable electricity generation facility of 10 megawatts or more requires a full, national Scoping and Environmental Impact Assessment.

But by bypassing these details at the planning level, there is a very real risk that land-use rights are being granted for a facility that lacks proper environmental authorisation.

While it's easy to dance around the water-use argument â because, yes, it does use less water than a golf course â the legal challenge brought by the Housing Assembly, Foxglove and the Legal Resources Centre is entirely justified.

It exposes a governance gap that is becoming a recurring character in Mzansiâs best-run city.

The City of Cape Town is willing to grant valuable, long-term land-use rights to a colossally resource-intensive tech hub ... while kicking the critical environmental assessments down the road to a non-public, administrative stage.

Every industrial revolution brings benefits and drawbacks. But we still need to read the fine print. And you can bet that I am going to be here for that environmental impact assessment report. DM

Reporting originally appeared via Daily Maverick. Read the full source for additional context.