Data Centers and Renewable Energy Join Forces to Attract Investments in Brazil

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The Brazilian government is working to attract international investments to develop data centers across the country, promoting the concept of sustainable and green assets. As part of that, Minister of Finance Fernando Haddad travelled to Silicon Valley in May to discuss the country's plan and the new national policy for data centers, known as Redata.

The policy has yet to be formally proposed by the government. However, the program could attract 2 trillion reais (about US$352 billion) in investments for the next 10 years, according to information shared by the ministry and local newspapers.

In exchange, companies could receive import tax exemptions, solid legal framework, as well as other benefit, as reported by news sources. Financing lines for data centers have been launched in the country to spur the industry, with the Brazilian Development Bank offering 2 billion reais (about US$352 million) in funding for data centers in 2024.

At the same time, companies are already announcing projects in the country, with Brazilian investment firm Patria Investimentos announcing in May investments of US$1 billion in a data center project in the South American nation.

IIR is tracking 127 data center projects with investments estimated at US$14.37 billion across Brazil. At the same time, IIR has mapped 94 active data centers across the South American country.

More importantly, Brazil could be an attractive place for data center developers, given its clean energy power matrix. The high demand for electricity generated by data centers is raising questions about the rapid development of new renewable capacity to meet their needs.

Meanwhile, renewable energy sources accounted for 88.2% of Brazil's power matrix, with solar and wind energy combined making up 24%. The nation's electricity matrix is dominated by hydropower. However, the country is also planning to increase its solar and wind power capacity in the next few years.

"We are building a robust public policy, based on dialogue with the private sector, to ensure predictability, energy efficiency and legal certainty for investors. Brazil has unique attributes, such as a clean energy matrix, installed technical capacity and a vocation for digital growth", said Haddad during his visit to the U.S. in May.

By the end of May, the National Operator of the Electric System (ONS) approved the connection of two new data centers that will come online at the Pecem complex in the state of Ceara, a new technological hub in the country. This will be the first two data center projects to connect to the Northeast Basic Network power system.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).