Egypt is moving quickly to carve out a regional role in the data center industry, with AI-driven demand for high-performance computing growing across the world. And while the country is attracting new, albeit limited, investments and building the supporting infrastructure, liquid cooling — not electricity alone — is emerging as the deciding factor between facilities that can keep up with the global GPU arms race and those that fall behind under extreme heat densities. This increasingly important part of emerging economies forces Egypt to confront a hard question: how do you scale data centers that require high water-use rates in a country already plagued with chronic water scarcity?

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Egypt’s data center footprint remains small — and the region is pulling ahead. Egypt currently hosts just 5.5% of the MENA region’s data centers. The country houses only 14 operational facilities, according to the Data Center Map (DCM). Saudi Arabia leads the region with 36 centers, followed by the UAE with 32. Even Oman surpasses Egypt with 15 centers despite having a population more than twenty times smaller. Egypt also trails several African peers, with South Africa leading the continent with 47 centers and Kenya with 18.

Liquid cooling is no longer an optional extra, but a foundational requirement for any modern data center that wants to keep pace with AI workloads, experts said during a session titled Innovations in Liquid Cooling at the AI Data Centers and Cloud Conference last month. Egypt stands at a pivotal moment as demand for high-performance computing grows and heat densities per rack climb to as much as 100 kW, a threshold air cooling can no longer support.

Why liquid cooling — and why now? Sector specialists explained that building a sustainable digital ecosystem is now a strategic necessity tied to future investment and cybersecurity. With GPU power increasing rapidly, air cooling simply cannot meet the new thermal loads. Liquid cooling has become the only viable method — at least for now — to protect the massive capital investments going into compute infrastructure, said Ecolab’s Roula Eid. Investment in data centers has shifted from a trend to an existential requirement for digital growth, added LiquidStack’s John Shehata. Meanwhile, Meinhardt’s Ahmed Mostafa said that adopting liquid cooling — or hybrid systems — is now the only path to handling current thermal densities. Water, noted Johnson Controls Arabia’s Maher Moussa, has become significantly more effective than air in dissipating heat inside modern data centers.

Why the shift? Liquid cooling delivers a clear operational edge as it can cut power consumption by around 30%, Eid said. It also offers heat-transfer performance 20-30x higher than air, according to both Shehata and Eid. Advanced systems like direct-to-chip and cold-plate cooling further boost efficiency and allow high-density deployments. Some solutions rely on fluid-phase change to achieve even better heat-management performance, Shehata added.

A new engineering paradigm — and infrastructure in need of a major lift. Experts agree that Egypt has strong potential in the data center space, but liquid cooling adoption will require sweeping changes in design and operations. Mostafa noted that low institutional awareness was a barrier in the past, but is now fading as global investors enter the market. Shehata called for a national initiative to develop pre-zoned sites for data center clusters, equipped with integrated energy and water infrastructure, especially as individual facilities may need 50-100 MW of electricity. Modern data center design, he said, relies on holistic systems that combine engineering, automation, and continuous monitoring.

Prefabricated units are becoming essential to reduce risk and improve liquid-cooling pipework quality, said Victaulic’s Abdelrahman Mokheimer. As hyperscalers enter the market, design is increasingly shaped by technology vendors, and integrating HVAC, power, and control systems is now mandatory to maintain performance at various Tier standards, Moussa added.

Egypt’s most significant challenge remains its water reality. Scaling high-energy, high-water-consumption data centers puts the country in a delicate position. How can Egypt attract hyperscalers and global AI players when it already faces an annual water deficit of around 7 bn cubic meters? Without a national framework that regulates water-use standards for data centers or incentivizes alternatives such as closed-loop immersion systems or water recycling, Egypt’s ambition to become a regional compute hub could run into environmental and economic barriers that cannot be ignored.

Water governance will make or break Egypt’s data-center ambitions. Experts argue that developing explicit national policies for water resources — along with incentives for advanced water-management technologies within new facilities — will be crucial for Egypt’s ability to accommodate future growth without overburdening its critical natural resources.

Your top infrastructure stories for the week:

  • Egypt is gearing up for the return of ships to the Suez Canal with a USD 1 bn plan to build bunkering stations along the canal.
  • The Damietta Container and Cargo Handling Company partnered with G3A on a rail link to and from the Damietta Container Terminal.
  • The Madbouly government will sign the management and operationscontract for Galala Marina next month, which will see the marina operated by Nautix — the marine services company owned by businessman Magdi Ghali.
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