Meeting Egypt’s data center ambitions doesn’t just present a technical and financial challenge, but an environmental one too. Back in May of last year, we asked how Egypt could position itself as a regional hub for data centers. Last month, we were also asking why we’re falling behind the emerging market data center boom. Egypt’s infrastructure ambitions are still big; and if we are serious about scaling AI, it’s time we start talking about what is really keeping the servers cool.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

We already know that data centers are power hungry as they are globally estimated to consume more than 1k TWh by 2026 — that’s more than double their consumption in 2022 — according to the International Energy Agency estimates (pdf) in January 2024. Data centers gobble up lots of energy to operate servers and cooling equipment, relying on robust power sources and emergency electricity sources to avoid technical problems.

But not as well known is how thirsty they are. A traditional cooling system for a small 1 MW data center can burn through 25.5 mn liters of water annually — equivalent to the daily water consumption of approximately 300k people, according to a study (pdf) written by Arcjet CEO David Mytton. GPT-3 is estimated to consume 500 ml of water per 10-50 responses, according to another study (pdf). By 2027, global AI demand is expected to account for 1.1 tn to 1.7 tn water gallons.

While this presents a challenge to any country, the calculation is somewhat more serious for a country like Egypt — with a 7 bn cbm annual water deficit coupled with a rising population and the threat of the Grand Ethiopian Renaissance Dam.

Water usage effectiveness (WUE) is the go-to metric for measuring how efficiently a data center uses water. It tracks how many cubic meters of water are consumed for every megawatt hour of energy used — i.e., water used for cooling per energy used to power. A facility running on air cooling alone could clock a WUE of zero. But swap in evaporative cooling, and that number can spike as high as 2.5, depending on the setup and the cooling tech. However, WUE only accounts for on-site water use, ignoring the indirect water consumption associated with electricity generation.

There’s more than one way to cool a data center, but most of them rely on water. Air cooling doesn’t rely on water, but it is not very commonplace since it increases the power consumption — although it decreases the WUE. The general approach involves chilled water systems reducing water temperature to around 7–10°C, then circulating that water to absorb heat. This is often mixed with cooling towers where external hot air flows across wet surfaces, evaporating the water. Fans expel the hot, wet air, and the cooled water is recirculated. Some use adiabatic spray systems — spraying water directly into airflow or onto a heat exchange surface, cooling the air entering the data center.

Most of Egypt’s operational data centers still run on traditional setups — a mix of air-cooled systems, chilled water systems, and direct expansion cooling units, Ecolab’s VP and Country Manager Nate Lubbs told EnterpriseAM. But when it comes to the country’s large-scale centers, chilled water systems with cooling towers dominate.

These systems can be particularly water-intensive in Egypt, where local water quality — high in minerals — requires more frequent system cleaning to prevent buildup in pipes and equipment. The required maintenance cycle for this drives up the overall water consumption, Lubbs said, adding that the quality of the cooling water can affect the equipment’s useful life.

One option to address the issue gaining traction is direct-to-chip (D2C) liquid cooling — a closed-loop system that recirculates water instead of consuming it, Lubbs said. It cools servers more efficiently and eliminates the need for air handlers or chilled water loops. Another approach is to pair D2C cooling with hybrid adiabatic systems using non-potable or treated water, which enables operators to sharply improve both PUE and WUE, Lubbs noted.

These more efficient cooling systems aren’t cheap to install, but they’re built for a long-term payoff. Operators can recoup the higher upfront costs through significant savings on energy and water, especially at scale, Lubbs told us. Add in AI-enabled tools, real-time performance monitoring, and high-efficiency cooling infrastructure, and operators could gain tighter control over their resource use. By making water use measurable and manageable, operators can move beyond treating it as just a cost — and instead see it as a strategic asset that supports growth, reliability, and environmental performance, Lubbs explained.

There are always trade-offs when building a data center, as evaporative cooling consumes less energy, but significantly more water, while air cooling consumes no water, but significantly more energy. Therefore, data center operators must pick a cooling technology that works best for the local environmental conditions prior to construction.

Sustainable cooling methods also work best when they’re part of the original blueprint, not tacked on later, Lubbs added. That means rethinking facility layouts for better airflow, building infrastructure that can handle non-potable sources like treated sewage effluent, and installing real-time monitoring to track usage. From Ecolab’s experience, the earlier these considerations are brought into the conversation, the smoother the transition goes. Successful implementation also depends on close collaboration between engineering, utility, and sustainability teams, Lubbs said.

To address the problem, Egypt could take a page from its neighbors in the UAE and KSA, where incentives have helped push energy-water-efficient tech into the data center mainstream, Lubbs tells us. We could follow suit by offering tax breaks or import duty exemptions for certified green data center technologies, grants or low-interest loans to offset capex for systems like D2C or hybrid adiabatic cooling, and utility rebates tied to performance benchmarks in WUE or PUE improvements. Encouraging the use of treated sewage effluent for industrial cooling — especially in industrial and development zones — could also go a long way, he added.

But despite data centres' intense water needs, the issue doesn’t get much of a mention in the latest National AI Strategy (pdf), which talks up green computing and energy-efficient infrastructure but doesn’t shed much light on managing the water footprint of data centers’ infrastructure. Cooling barely gets a mention — and even then, it’s only in the context of energy use.

Water is often left out of the convo, but it shouldn’t be. Across the region, talk of sustainable cooling usually starts and ends with energy efficiency, leaving out a critical piece of the puzzle. “In Egypt, where water stress is already a national concern, we need to ensure that water is part of the planning — not an afterthought,” Lubbs remarked.

Your top green economy stories for the week:

• More organic fertilizers made from plant and animal waste will soon hit the market following an agreement inked between the Arab Organization for Industrialization’s Arab British for Dynamics Industries and the Agriculture Ministry’s Agricultural Research Center. The project will help cut down on the country’s import bill by helping to meet the local market demand for fertilizers. (Cabinet statement)
• Sumitomo Electric inaugurated its solar-powered EUR 22 mn automotive wiringharnesses factory in Tenth of Ramadan as part of Egypt’s efforts to expand the local automotive feeder industry and localize production.
• The government wants to direct 55% of investments toward the green economy over the next four fiscal years, according to a document seen by EnterpriseAM. The document also laid out the country's goal of becoming a regional hub for green hydrogen in 2026.