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2 Jun 2022

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Brazil's data localization law spurs investment growth in data centers

Data center investments have increased by 45% in Brazil. The growth can mainly be attributed to projects from colocation providers such as Ascenty, Scala Data Centers, and ODATA. Telcom opereators such as Embratel, Ava Telecom, and GlobeNet Telecom have also built new facilities in Brazil.

Brazil's new privacy law is partly responsible for this growth. Latin-American country enacted a data localization law, the Lei Geral de Protecao de Dados Pessoais (LGPD), in August 2020, contributing to its data center development. The General Data Protection Law is a federal law that unifies 40 existing laws to regulate the processing of personal data. It went into effect on August 16, 2020.

The LGPD has forced many organizations to store privacy-sensitive data in Brazil. As a result, Brazil's digital infrastructure has grown substantially. Not just in data centers, but also in the energy infrastructure needed to sustain Brazil's digital economy. For example, Scala Data Centers signed a PPA with French technology company Engie to power their facilities with 100% green energy.

There are 46 colocation data centers in Brazil. ODATA, HostDime, Angola Cables, Ascenty, Lumen Technologies (CenturyLink), Sonda, and Equinix data centers are designed and built according to Tier III standards.

Brazil's government provides incentives for investments in local data center projects through the Regime Especial de Tributacao do Programa Nacional de Banda Larga (REPNBL) program. The program includes incentives for the purchase of infrastructure that will improve local broadband connectivity throughout the country. Companies like the International Finance Corporation (IFC) and Goldman Sachs are financing companies like ODATA and Elea Digital to build data centers across the country.

In order to support the growth of the digital infrastructure in the country, the Brazilian Ministry of Economy has partnered with Microsoft to provide training and job opportunities through the e-learning platform 'School of Worker 4.0'. The program created 123,000 jobs in just nine months last year.

ResearchAndMarkets published a report recently about the Brazilian data center market.

Photo credit: Raphael Nogueira

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