REDATA: New Special Regime for Data Centers May Unlock Trillions in Investments in Brazil

Last Wednesday (17), the Brazilian government announced the creation of REDATA, a special regime for data centers in the country, through Provisional Measure No. 1,318/2025. The initiative introduces significant changes aimed at boosting competitiveness, sustainability, and investment in the sector.

 

Key changes introduced by the measure

• Suspension of federal taxes for 5 years, focused on equipment, which accounts for 50–60% of the total cost of building a new data center.

• Sustainability requirements, including efficiency in water usage and the exclusive adoption of clean and/or renewable energy sources.

• Co-enablement of critical suppliers, allowing part of the value chain to benefit from the regime.

• 10% of capacity allocated to the domestic market, ensuring local market impact.

• Mandatory investment in R&D, equivalent to 2% of equipment value.

• Incentives for deployment in the North, Northeast, and Midwest regions, promoting greater decentralization of digital infrastructure.

 

Open questions

Despite the advances, some points remain unclear:

• The regulation establishing the criteria and process for eligibility has not yet been released, nor has the expected timeframe for analysis.

• There is no definition regarding the validation process for similar locally produced equipment, nor clarity on the scalability of this analysis or how competitive domestic alternatives truly are in terms of cost and quality.

 

Bamboo DCM’s Analysis

REDATA represents a milestone for the data center sector in Brazil, with strong potential to increase the country’s attractiveness compared to other global markets. Key highlights include:

• The measure addresses structural bottlenecks, particularly related to high equipment costs, and is expected to gain traction as the capital markets mature, increasing available funding via structured credit.

• Brazil, already the largest regional player in installed capacity (665 MW), strengthens its leadership and now benefits from policies aligned with international best practices.

• High connectivity and low latency support integration with the U.S., Europe, and the Southern Cone—critical factors for expansion.

• The country’s predominantly clean and renewable energy matrix reinforces its positioning as an attractive hub, with significant additional generation capacity still available to connect to the grid.

• The forthcoming regulation will be decisive for enabling companies and accelerating investments, estimated by the government at up to BRL 2 trillion.

REDATA is therefore a strategic step in consolidating Brazil as a global digital hub, combining fiscal incentives, sustainable commitments, and financing opportunities for a rapidly expanding sector.

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