Nigeria is one of Africa's fastest-growing data center markets. Demand from banks, telecoms operators, fintechs, government and cloud providers, together with the Nigeria Data Protection Act 2023 and rules that require some data to be hosted in Nigeria, is driving investment in new colocation, enterprise and hyperscale facilities. Most are in Lagos, with others in Abuja and a growing number of edge sites in other cities.
A data center project combines real estate, construction, energy, telecoms, data protection and foreign investment law. Our data center lawyers bring these together in one team, so your project is not held up by an approval that nobody was responsible for.
For a step-by-step overview, read our guide on how to set up a data center in Nigeria.
Who we act for
- International and Nigerian data center developers and operators
- Hyperscale and cloud providers building or leasing capacity in Nigeria
- Banks, telecoms operators and large enterprises building their own facilities
- Infrastructure funds, private equity investors and lenders financing or acquiring data centers
- Landowners and developers building powered shells or build-to-suit facilities
- Contractors and equipment suppliers on data center projects
Our data center legal services
Company, investment and tax
- incorporating the project company and registering it with the Nigerian Investment Promotion Commission where there is foreign participation; see NIPC registration and investment incentives
- bringing capital in through the banking system with a Certificate of Capital Importation, so that dividends and loan repayments can later be repatriated
- joint ventures, shareholders' agreements and investment agreements with local partners
- business permits and expatriate quota for foreign staff
- tax incentives, customs duty on imported equipment and free zone options; see tax advisory
Site and real estate
- due diligence on the site's title, zoning and permitted use, and on the legal rights needed for power and fibre access
- purchase, long lease and build-to-suit agreements, and Governor's consent
- powered shell, sale and leaseback, and expansion land arrangements
Permits and approvals
- planning permits and building approvals: LASPPPA and LASBCA in Lagos, and the Department of Development Control in Abuja
- environmental impact assessment and state environmental permits, including for back-up generators
- fire safety certification
- approvals for storing diesel and gas on site
Power
Power is usually the largest operating cost and the biggest risk for a data center in Nigeria. We advise on:
- captive generation permits for on-site power plants above 1 MW, from NERC or, where a state has its own electricity market, as Lagos does, from the state regulator
- power purchase agreements with generation companies, distribution companies and independent power producers, including eligible customer arrangements
- gas supply, solar and hybrid power projects; see electricity and power sector regulation
Telecoms and connectivity
- whether the services you offer need a licence from the Nigerian Communications Commission, for example where the operator provides connectivity, internet or interconnection services as well as space and power; see telecommunications licensing
- fibre, IRU and cross-connect agreements, and carrier-neutral arrangements
- right of way permits for fibre routes
Data protection, localisation and cybersecurity
- the operator's obligations as a data processor or controller under the Nigeria Data Protection Act 2023; see data protection compliance
- data localisation rules that require customers to host data in Nigeria, including NITDA's Guidelines for Nigerian Content Development in ICT and rules for banks, telecoms operators and government agencies
- cybersecurity obligations under the Cybercrimes Act, including where a facility forms part of critical national information infrastructure
Construction and equipment
- EPC and design and build contracts for the building and its mechanical and electrical systems; see construction contracts
- supply agreements and warranties for generators, UPS systems, cooling and switchgear
- performance bonds, liquidated damages and commissioning tests
Customer and operating contracts
- colocation agreements, master services agreements, service level agreements and service credits
- wholesale and hyperscale leases
- facility management, maintenance and security contracts
- cloud and managed services terms, including the currency and indexation of fees
Financing and acquisitions
- project finance and corporate financing of data center projects, including by development finance institutions
- acquisitions and sales of data center businesses and assets, including due diligence and FCCPC merger approval; see mergers and acquisitions
Data centers in Lagos
Lagos hosts most of Nigeria's data center capacity because it is where submarine cables land, where most banks, telecoms operators and large companies are based, and where demand is highest. Lagos has established its own electricity market under the Electricity Act 2023, so power arrangements in the state are regulated by the Lagos State Electricity Regulatory Commission. Our Lagos office in Lekki advises on site selection, LASPPPA and LASBCA approvals, power and the free zone options around Lekki.
Data centers in Abuja
Abuja is home to the federal government, its ministries and agencies and the main regulators, which makes it important for providers serving the public sector and regulated industries. Land in the FCT is allocated for specific uses, so a data center site may need a change of use approval, and Ministerial consent is needed for transfers. Our Wuse 2 office deals directly with the FCT authorities and federal regulators.
