Luciano Fialho, senior vice president at Scala Data Centers, states Brazil has a three-year opportunity window driven by five-to-seven-year grid connection queues in the United States and Europe creating a processing capacity gap. Immediate action is required to deliver facilities within two to three years to capture this demand. The executive warns that failure to act rapidly will redirect investments to competing markets including Argentina and Paraguay. Brazil currently operates 188 cloud-focused data centers, ranking 12th globally according to Data Center Map, with no facilities dedicated to artificial intelligence training workloads.
Approximately 60 percent of Brazil’s digital services are processed abroad, primarily in the United States, according to Ministry of Finance data. Charles Schramm of FGV Projetos, who authored the study, calculates that a 100-megawatt data center adds R$1.5 billion to Brazilian GDP. The study advocates for a unified approach to data center policy rather than fragmented sectoral initiatives. Industry groups including Brasscom, ABES, Abdib, and Movimento Brasil Competitivo presented the findings alongside proposals for a “Brasil Hub Digital – Setor Energia” working group coordinated by the Ministry of Mines and Energy with participation from EPE, Aneel, ONS, and CCEE.
Brazil’s renewable energy matrix reached 88.2 percent in 2024, with wind and solar comprising 24 percent of generation, positioning the country favorably against markets facing energy constraints. Investment estimates for Brazilian data center infrastructure range to $92 billion between 2025 and 2031. However, ICMS state value-added tax represents 64 percent of the tax burden on data center equipment, making Brazilian project implementation costs approximately 34 percent higher than in the United States according to Brasscom. Confaz, the state tax council, is analyzing a proposal to reduce ICMS by up to 90 percent on information and communication technology equipment for data centers, with support expressed by Rio Grande do Sul, Ceará, Minas Gerais, and São Paulo during a March 27, 2026 meeting. Gecex Resolution 852/2026 increased import duties on servers, network equipment, and semiconductors to rates between 7.2 and 25 percent, further pressuring project economics in the absence of federal tax relief.
This article was curated and published as part of our South American energy market coverage.
