Meta, Microsoft expand South African investment despite sector slowdown

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Emilio Ghigini

03.08.2025

Meta, Microsoft expand South African investment despite sector slowdown — Renewables dominate private investment amid grid, demand challenges

In 2025, the total value of large investment projects in South Africa almost halved. However, tech giants like Meta and Microsoft remain actively involved in developing the local economy with a global vision.

According to Nedbank’s latest report, the annual value of newly announced investment projects fell to R316.2 billion ($17.7 billion), nearly half of the R592.2 billion ($33.2 billion) recorded in 2024.

The decline is less dramatic when considering that neither the government nor state-owned companies announced new projects this year. In 2024, the public sector accounted for 83% of the total value, including R199.8 billion from government and R290.7 billion from state-owned enterprises.

In contrast, all new projects announced in the first half of 2025 are driven by the private sector, including major tech players.

Meta, the parent company of Facebook and Instagram, plans to connect North and South America, Africa, India, and Australia with a 50,000-kilometer undersea data cable. The "Wodeward Project" aims to become the world’s largest fiber-optic network. South Africa will serve as a critical connection point between South America and Asia, with Meta expected to invest at least $1 billion locally.

Microsoft also plans to invest about $300 million (R5.4 billion) in expanding its cloud infrastructure in South Africa.

Renewables lead investment despite grid limitations

More than half of private investments in South Africa are directed toward the energy sector, reflecting a structural shift toward renewables and the central role of energy security in driving capital formation.

“This trend highlights ongoing efforts to overcome the energy crisis and reduce coal dependence,” Nedbank reported.

The largest private project is Earth & Wire’s Energy Fields initiative, valued at R40 billion ($2.24 billion), which includes solar and wind farms with a total capacity of 1.5 GW and 400–500 MW of battery storage.

The second-largest project is a coal-to-fertilizer plant by SUISO, worth R31.5 billion, in Kriel. It aims to produce 1.5 million tons of nitrogen fertilizer annually to reduce South Africa’s reliance on imports.

Other major energy initiatives include Overberg and Ishwati Emoyeni wind farms, Photon Energy’s concentrated solar power plant with thermal storage, and the Hauta solar project.

Nedbank noted that while renewables remain key, growth may slow in the near term due to the limited capacity of the national grid and transmission infrastructure.

"Global headwinds, such as weakening external demand and falling commodity prices amid rising trade tensions, pose downside risks,” Nedbank said.

Still, the implementation of the National Transmission Development Plan could unlock a new wave of energy investment. Lower interest rates are also expected to boost domestic demand, reduce excess capacity, and encourage corporate expansion.

Nevertheless, the report cautions that the private sector may remain cautious until the government delivers on its major infrastructure projects in water, energy, and logistics.

As we wrote, SA debt ratio nears crisis as borrowing rises

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