Brazil operates 206 data centers, the highest concentration in South America, with companies announcing over BRL 80 billion in new projects over the past two years. Despite this momentum, the federal Redata incentive program lapsed in Congress without renewal. Currently, 40 percent of Brazil’s digital demand is met domestically, while 60 percent relies on foreign infrastructure, primarily in the United States, according to Ministry of Finance data. This external dependence contributes to an estimated USD 6.8 billion trade deficit and increases latency for digital services.
Daniel Cordeiro, a researcher at the University of São Paulo’s Center for Science and Development, noted that Brazil’s renewable energy abundance and strategic position along submarine cable routes maintain investment attractiveness despite the Redata expiration. However, power shortages are already materializing in the São Paulo-Campinas corridor, which hosts 80 of Brazil’s 200 data centers. Research published by São Paulo State University highlights water consumption risks in the Alto-Tietê and Piracicaba-Capivari-Jundiaí basins, both historically stressed by drought. Global data center water use may double to 1.2 trillion liters by 2030, according to the International Energy Agency, raising concerns about feasibility in water-constrained regions. The Redata program mandated Water Usage Effectiveness of 0.05 liters per kilowatt-hour annually, though Microsoft and Amazon reported operational levels of 0.3 and 0.15 liters per kilowatt-hour respectively in recent disclosures.
The tension between energy infrastructure availability and digital infrastructure expansion mirrors challenges in the United States and Europe, where connection wait times for new facilities now extend up to seven years in congested markets like Virginia and Dublin.
This article was curated and published as part of our South American energy market coverage.
