An overlooked 10+ GW of grid-ready capacity, a significant cost advantage and a narrow window to reshape the global map of AI infrastructure.
By Lucas Salgado, Global Strategy Director and Head of Data Center & Powerland, Atlas Renewable Energy
The global race to build AI infrastructure is often framed as a contest between the United States, Europe and APAC. Developers in the United States face an interconnection queue of more than 2,600 GW [1], over twice the country’s entire installed generation, with median wait times approaching five years [2]. Europe has roughly 1,700 GW of renewable capacity stalled in grid connection processes [3], while APAC’s most attractive hubs are running out of headroom. Latin America, by contrast, may have the world’s most overlooked advantage: an immediately available, low-cost power base capable of hosting gigawatts of AI computing.
The premise of this article, and a central theme of the discussion at DCPI-LATAM, is that Latin America is not a secondary market waiting its turn. It is a substantial, underused power base with a real opportunity to capture near-term AI infrastructure demand. Whether the region serves only as a temporary bridge while other markets clear their queues, or establishes a lasting position as a hub for the digital economy, will depend on what happens over the next 12 to 18 months and on how effectively the obstacles described below are addressed.
A near-term power advantage
Latin America has more than 10 GW of power available in its existing grids over the next two to three years. According to Atlas Renewable Energy‘s internal market analysis, based on its operational portfolio and pipeline across Brazil, Chile, Mexico and Colombia, this capacity can be unlocked without new transmission reinforcements [A]. That is a markedly different starting point from other regions. In the United States, PJM projects energizing in 2025 had spent an average of eight years in the queue [2]. Europe’s bottleneck is structurally similar, while APAC’s leading hubs are saturating.
Brazil and Chile, in particular, offer specific sites with more than 1 GW of available capacity at a single point of interconnection, according to Atlas’s internal analysis [A]. Grid capacity, however, is only part of the equation. The pace at which projects actually get built also depends on equipment lead times, permitting and financing, as discussed below. On the equipment side, Atlas estimates that delivery of HV transformers, switchgear and IT equipment to Brazil and Chile can run 30–50% faster than to comparable U.S. locations, as supply chains route through ports that are not congested by the same domestic demand surge [A].
The economics of the opportunity
Brazil, Chile and Mexico can deliver renewable electricity at all-in costs that compare favorably with what hyperscalers typically secure in other major markets. Atlas’s internal pricing analysis indicates costs below USD 0.06/kWh in Brazil, Chile and Paraguay [A]. At the same time, Brazil and Chile are sitting on a growing surplus of renewable energy.
Brazil, in particular, is facing significant curtailment. This is wind and solar generation that the system has to discard because there is not enough load nearby to absorb it. In Brazil alone, curtailment reached 20.6% of total wind and solar generation in 2025, representing roughly 20 TWh of clean electricity and an estimated cost of USD 1.2 billion to project developers [4]. Brazil’s National System Operator (ONS) projects that by 2029, up to 96% of curtailment will be driven by structural supply-demand imbalance rather than transmission constraints [5].
This changes how the AI infrastructure conversation should be framed in the region. In most of the world, data centers are treated as a new burden on the grid. In parts of Latin America, they could instead be a solution. AI load is large, around-the-clock and geographically flexible. It is exactly the kind of demand that could allow these grids to monetize renewable generation that is currently being wasted.
The same mix of wind, solar, battery storage and hydro that contributes to the curtailment challenge also makes a credible 24/7 carbon-free energy offering possible. This is increasingly a requirement in hyperscaler procurement criteria.
What is holding the market back?
If the case is this strong, the obvious question is why Latin America has not already captured a larger share of global AI infrastructure investment. The answer is not the grid, nor is it the underlying economics. The barriers are regulation, permitting, financing structures and execution risk. The central question is whether the region’s institutional machinery can move at the speed the industry now expects.
Two pending regulatory measures illustrate the problem in Brazil. The first is REDATA (Regime Especial de Tributação para o Setor de Datacenters), a proposed special tax regime that would suspend the federal taxes and import duties Brazil normally levies on servers, transformers and other high-value equipment. These charges can otherwise add double-digit percentages to a project’s capital budget.
The second concerns Article 21A of the rules governing Brazil’s Export Processing Zones (Zonas de Processamento de Exportação), which extend customs and tax relief to qualifying operations. Delay on either front reintroduces, through the tax code, much of the cost burden that Brazil’s competitive power prices would otherwise offset.
BESS deployment faces a related challenge. High import taxes continue to slow battery storage buildout in Brazil, even as storage becomes more central to firming renewable supply for large loads.
The obstacles extend beyond tax policy. In Chile, environmental licensing has frozen or cancelled high-profile projects. In Brazil, municipal-level approvals remain a recurring risk for hyperscalers evaluating sites. In Mexico, the interconnection process remains opaque on both cost and timing for grid reinforcements. Recent delays in system expansion and the energization of data center buildings in Querétaro have added further caution.
Financing is another hurdle. Large-scale AI infrastructure requires long-tenor capital, and currency risk, political cycles and permitting uncertainty all affect how lenders and hyperscalers price that risk in Latin America relative to more established markets. Connectivity also has to keep pace. Without sufficient subsea cables, terrestrial backbones and fiber corridors, grid capacity alone will not be enough to close deals.
None of these problems are unusual for a fast-growing market, and none of them are unsolvable. However, they require deliberate and coordinated work. That includes clear regulation guaranteeing power capacity to large loads, sustained investment in grid reinforcement, continuity of the policies that made renewables competitive in the first place, and better incentives, including tax relief, for BESS deployment.
Turning potential into projects
Closing these gaps depends on utilities, regulators, hyperscalers, developers and financiers working from the same picture of what is achievable and on what timeline. This is precisely the value of forums like DCPI-LATAM, the 1st LATAM Data Center Power & Infrastructure Summit taking place July 14–15 in Rio de Janeiro.
Bringing these groups into the same room, rather than negotiating market by market and project by project, is one of the most direct ways to convert this narrow window into real, contracted capacity.
A bridge or a lasting digital hub?
Taken together, Latin America offers a combination that is genuinely difficult to find elsewhere: abundant land, a power grid with real near-term headroom, some of the most competitive renewable energy anywhere, and a deep pool of STEM talent across countries that have built world-class engineering, operations and digital capabilities over the last two decades.
Used well, this window could allow the region to host gigawatt-scale AI deployments at a pace few other markets can match. The near-term opportunity is to serve as a bridge, providing a place where hyperscalers and AI companies can land capacity while their U.S., European and APAC pipelines slowly clear. This opportunity is emerging against a global AI data center demand forecast that is expected to grow 3.5 times by 2030, reaching 156 GW worldwide [6].
The longer-term opportunity is structural. Latin America has the natural and institutional ingredients to become a lasting hub of the digital economy, provided its regulators, financiers and infrastructure developers close the execution gap at the same pace the market is moving.
From opportunity to execution
On Tuesday, July 14, Lucas Salgado will join Equinix, Ascenty and Alvarez & Marsal on the opening panel at DCPI-LATAM, “Break the Energy Bottleneck: Scaling Generation from Megawatts to Gigawatts.”
Three questions will frame the discussion. How are energy producers and utilities planning the jump from 20 MW data centers to 500 MW-plus AI campuses? What self-generation and behind-the-meter strategies are operators choosing while transmission catches up? How do energy, fiber and connectivity requirements vary across Latin American markets, and what does that mean for where infrastructure ultimately gets built?
The central premise is clear: the region already has the energy. What it needs now is regulatory clarity, coordinated infrastructure investment and financing, and the speed of execution required to convert that energy into operating gigawatts before the window narrows further.
The capacity is there and the economics are compelling, but capturing the opportunity will require sustained coordination among regulators, utilities, developers and investors. The opportunity is real. The question is whether Latin America can move quickly enough to capture it before the window closes.
Sources & References
Published sources
On Tuesday, July 14, Lucas Salgado joined Equinix, Ascenty and Alvarez & Marsal on the opening panel at DCPI-LATAM, “Break the Energy Bottleneck: Scaling Generation from Megawatts to Gigawatts.”
Three questions framed the discussion. How are energy producers and utilities planning the jump from 20 MW data centers to 500 MW-plus AI campuses? What self-generation and behind-the-meter strategies are operators choosing while transmission catches up? How do energy, fiber and connectivity requirements vary across Latin American markets, and what does that mean for where infrastructure ultimately gets built?
The central premise is clear: the region already has the energy. What it needs now is regulatory clarity, coordinated infrastructure investment and financing, and the speed of execution required to convert that energy into operating gigawatts before the window narrows further.
The capacity is there and the economics are compelling, but capturing the opportunity will require sustained coordination among regulators, utilities, developers and investors. The opportunity is real. The question is whether Latin America can move quickly enough to capture it before the window closes.
