Data Centers in Bagratashen
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Bagratashen – Strategic Gateway to the Caucasus
As a developing digital hub, Bagratashen provides a strategic entry point for businesses looking to serve Armenia and the wider Caucasus region. This market is best suited for companies requiring a foothold for logistics, cross-border trade, and regional content delivery. Deploying infrastructure here allows businesses to establish a presence in an underserved market with favorable tax conditions for IT investment.
Bagratashen: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Emerging market with foundational international connectivity. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network extension to major European or Middle Eastern hubs. |
| Power Cost | ֏45.00–֏55.00/kWh (est.) | Diverse energy mix including nuclear, renewable, and natural gas sources. |
| Disaster Risk | Low (3.1/10) – as of September 2025 | Key risks are seismic activity and river flooding, requiring specific facility engineering. |
| Tax Incentives | Yes | Includes exemption from import tariffs and VAT on production equipment. |
| Sales Tax | 20% VAT – as of September 2025 | The standard national value-added tax rate applies to services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality The market is served by over 1 data center, as of September 2025. While carrier density is still developing, the facility in Bagratashen provides access to key national telecom operators and transit providers, offering essential connectivity for reaching end-users within Armenia and across its borders.
Direct Cloud On-Ramps There are no direct cloud on-ramps within Armenia, as of September 2025. Businesses connect to hyperscale clouds like AWS, Google Cloud, and Microsoft Azure through network providers offering private links (PNI/wave) to major interconnection hubs in Europe or the Middle East.
Internet Exchange Points (IXPs) The primary Internet Exchange Point is the Armenia Internet Exchange (ARMIX) located in Yerevan. Peering at ARMIX is critical for reducing latency for Armenian end-users by keeping domestic traffic within the country's borders.
Bare Metal Bare metal server options are available, enabling businesses to deploy dedicated compute without capital expenditure. Providers like Hivelocity offer solutions that can be connected to the local ecosystem, providing a foundation for private cloud or performance-sensitive applications.
Power Analysis
Average Cost Of Power The estimated industrial power cost is between ֏45.00–֏55.00/kWh, as of September 2025. This competitive pricing, supported by a diverse energy portfolio, helps reduce the overall operational expense of running digital infrastructure. Armenia's grid benefits from a balanced mix of nuclear (~40%), renewable (~30%), and natural gas (~30%) generation.
Power Grid Reliability The national power grid is generally reliable for commercial operations. Data centers in the region are engineered with redundant power systems, including UPS and on-site generators, to ensure high levels of uptime for critical IT workloads.
Market Access, Business & Tax Climate
Proximity To Key Business Districts Bagratashen's primary advantage is its location on the Armenia-Georgia border. This makes it a crucial point for logistics, international trade, and data traffic flowing between the two countries and onward to the wider region.
Regional Market Reach From Bagratashen, businesses can effectively serve the populations of Armenia and Georgia. Its strategic position makes it a logical point of presence for content delivery networks and service providers targeting the growing digital economies of the South Caucasus.
Tax Advantage For Data Centers Armenia offers a significant tax incentive for data center investments. The government provides exemptions from import tariffs and VAT on imported production equipment and certain data center services, which directly lowers the initial capital cost of establishing or expanding a physical hardware presence.
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 aggregate risk is low, operators must engineer facilities to mitigate specific, elevated regional hazards.
The primary environmental risks include:
- Earthquake: Score of 7.3, representing a significant seismic risk that necessitates modern, earthquake-resistant building standards.
- Drought: Score of 5.4.
- River Flood: Score of 5.3, requiring facilities to be located outside of known flood plains.
- Epidemic: Score of 4.1.
