Data Centers in Bagratashen
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Bagratashen – Strategic Edge Gateway to the Caucasus
Bagratashen represents an emerging edge data center market, positioned strategically on the border between Armenia and Georgia. It is best suited for organizations requiring a digital infrastructure footprint to facilitate cross-border trade, logistics, and localized data processing for the Caucasus region. This location provides a unique opportunity to serve low-latency applications connecting Armenia, Georgia, and surrounding markets.
Bagratashen: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Good international connectivity, though lacking hyperscale cloud presence. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network providers connecting to hubs like Frankfurt or Amsterdam. |
| Power Cost | ֏40.00 – ֏55.00/kWh | Industrial power costs are competitive for the region. Power mix is notably diverse. |
| Disaster Risk | Low (3.1/10) – as of September 2025 | Primary risks are seismic activity and drought; overall risk profile is low. |
| Tax Incentives | Yes | Includes exemptions from import tariffs and VAT on key data center equipment. |
| Sales Tax | 20% VAT – as of September 2025 | The standard Value Added Tax rate applied in Armenia. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: The market features a developing ecosystem of local and regional carriers, as of September 2025. While not densely populated with international providers, carrier-neutral facilities provide access to the primary networks servicing Armenia and transiting through the region.
Direct Cloud On-Ramps: There are no direct cloud on-ramps located in Bagratashen, as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure through private network extensions to major European hubs such as Frankfurt, Amsterdam, or Marseille.
Internet Exchange Points (IXPs): Peering is primarily handled through the Armenian Internet Exchange (ARMIX) located in Yerevan. ARMIX is central to keeping local traffic within the country, reducing latency for domestic users. Most international peering occurs privately or through upstream providers.
Bare Metal: Bare metal server availability is present, typically through providers with a broad European presence. Services from vendors like OVHcloud and Leasebew can be deployed to serve workloads in the region.
Power Analysis
Average Cost Of Power: Industrial electricity rates generally fall between ֏40.00 – ֏55.00/kWh, as of September 2025. These competitive power costs, combined with a diverse generation mix, create a stable financial environment for high-density deployments. Armenia's power is sourced from a mix of nuclear (~40%), natural gas (~30%), and renewables (~30%).
Power Grid Reliability: The Armenian power grid benefits from a significant baseload provided by nuclear generation, contributing to overall stability. Modern data center facilities in the region are engineered with full N+1 or 2N redundancy, including backup generators and UPS systems, to ensure uptime regardless of grid conditions.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: As a primary border crossing, Bagratashen is integral to trade and logistics between Armenia and Georgia. Data centers here are positioned to support customs, supply chain management, and financial services operations that depend on low-latency cross-border connectivity.
Regional Market Reach: Bagratashen serves as a digital outpost for the South Caucasus, offering a strategic point of presence for companies looking to serve users in Armenia and Georgia. It also acts as a potential gateway for data traffic moving between Iran, Russia, and the Black Sea region.
Tax Advantage For Data Centers: Armenia offers a specific incentive for data center investments. The government provides exemptions from import tariffs and Value Added Tax (VAT) on qualifying production equipment and services. This significantly reduces the initial capital expenditure required to build and equip a modern data center facility.
Natural Disaster Risk
Armenia has a Low overall natural disaster risk profile, with an INFORM Risk score of 3.1 out of 10, as of September 2025. While the composite risk is low, operators must engineer facilities to mitigate specific regional hazards.
The most significant natural risks include:
- Earthquake: Score 7.3/10
- Drought: Score 5.4/10
- River Flood: Score 5.3/10
- Epidemic: Score 4.1/10
