Chinese technology conglomerate Tencent has announced its first internet data centre in the Middle East and North Africa (MENA) region as part of a deal with the Bahrain Economic Development Board.

Tencent Cloud, the cloud computing division of Tencent, signed a memorandum of understanding with the Bahrain Economic Development Board that will see the investment promotion agency encourage adoption of cloud services across the country.

The cloud computing company will also set up training initiatives in partnership with local government in educational institutions across the kingdom.

Tencent’s Bahrain data centre is set to go live by the end of 2021.

The deal marks an expansion into a new high-growth market for Tencent, with MarketsandMarkets forecasting the Middle East cloud market to reach $4.5bn by 2024 at a compound annual growth rate of 17.5%.

It also provides an opportunity for Tencent to make up ground on its cloud computing rivals.

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In China three cloud providers jostle for business. According to analyst firm Canalys, Alibaba Cloud holds a 41% market share, followed by Huawei Cloud and Tencent Cloud with a joint 16% share.

But globally Tencent ranks seventh for cloud market share, according to Synergy Research Group. US tech firm Amazon Web Services is the frontrunner, holding 32% of the global market.

The memorandum of understanding also falls within China’s Belt and Road initiative, launched in 2013 to invest in infrastructure across countries in Asia, Africa, and Europe.

“While the local government in Bahrain has been making significant efforts to grow the local internet data centre (IDC) industry, Tencent Cloud is excited to collaborate with Bahrain EDB as part of our ongoing efforts to ramp up the global IDC landscape,” said Poshu Yeung, senior vice president, Tencent Cloud International.

“We will launch all necessary steps to set up a brand-new IDC in Bahrain to provide better coverage all over the Middle East and North African regions along the Belt and Road, fully supporting Bahrain’s ‘Cloud-First’ strategy.”

In 2017 Bahrain introduced its Cloud-First strategy to boost IT services in government, which included moving state departments and entities to the cloud.

H.E. Kamal bin Ahmed Mohammed, Bahrain’s minister of transportation and telecommunications, said: “This is an important milestone in Bahrain’s journey to become the MENA region’s cloud and data centre hub and I commend the EDB for their ceaseless efforts in developing the partnership with Tencent and ensuring that Bahrain is a favoured destination for investment.

“Tencent joins leading global cloud giants in setting up in Bahrain which will drive massive growth in data traffic towards MENA. Moreover, the launch of the new data centre stands to create a clustering effect as other global providers turn their attention to the increasingly attractive region, with Bahrain positioned as the destination of choice with proactive initiatives such as the government’s ‘Cloud-First’ policy and nationwide 5G.”

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