Data Centers in El Salvador
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Explore Markets in El Salvador
El Salvador – A Strategic Hub for Central America
El Salvador is establishing itself as a viable colocation market for companies targeting Central America. The country's focus on technology-friendly legislation and investment in its power grid creates a compelling environment for businesses that need a reliable digital foothold in the region. For organizations looking to serve the growing economies of Guatemala, Honduras, and Nicaragua, El Salvador provides a strategic and cost-effective base of operations.
El Salvador: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Reliable connectivity suitable for regional business operations. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Connect via network extensions from hubs like Miami or Mexico City. |
| Power Cost | US$0.09/kWh – as of December 2024 | Highly competitive pricing with a significant renewable energy mix. |
| Disaster Risk | Moderate (4.0/10) – as of September 2025 | Primarily seismic and tsunami risk, requiring site-specific due diligence. |
| Tax Incentives | Yes | ICT Innovation Law provides exemptions and benefits for technology companies. |
| Sales Tax | 13% VAT – as of September 2025 | Standard value-added tax applies to services. |
Network & Connectivity Ecosystem
El Salvador's connectivity landscape is concentrated, offering solid regional access rather than global hyperscale performance. It's a practical choice for deploying applications closer to end-users in the Northern Triangle of Central America.
Carrier Density & Carrier Neutrality: The market includes service from several regional and international carriers, as of September 2025. While smaller than major hubs, carrier-neutral facilities provide sufficient options for redundant network architectures.
Direct Cloud On-Ramps: There are no direct, in-country cloud on-ramps from major providers, as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud, and Azure through private network extensions to primary access points in Miami, FL or Mexico City.
Internet Exchange Points (IXPs): Public peering is limited within El Salvador. Most traffic is exchanged privately between carriers or routed through international hubs, which can impact latency for purely local traffic.
Bare Metal: Bare metal server options are available, typically through regional providers or by deploying customer-owned hardware in colocation facilities. This allows for dedicated performance where cloud proximity is not the primary driver.
Power Analysis
El Salvador stands out for its progressive and cost-effective energy infrastructure, a critical factor for any data center deployment.
Average Cost Of Power: At US$0.09/kWh for industrial use, as of December 2024, power costs are highly competitive. This low price, combined with an 83% low-carbon energy mix from hydro and geothermal sources, makes it financially and environmentally attractive.
Power Grid Reliability: The national power grid is stable, particularly in the commercial zones where data centers are located. Investment in geothermal energy contributes to a reliable and sustainable power supply, reducing dependence on fossil fuels and price volatility.
Market Access, Business & Tax Climate
The government's proactive stance on technology investment creates a favorable business environment for digital infrastructure.
Proximity To Key Business Districts: Data centers in El Salvador serve the capital, San Salvador, which is the country's primary financial and industrial center. This proximity ensures low-latency connectivity for local enterprises in banking, manufacturing, and logistics.
Regional Market Reach: El Salvador provides an effective point of presence for serving the nearly 30 million people across Guatemala, Honduras, and El Salvador itself. It acts as a central hub to reduce latency and improve application performance across this interconnected economic zone.
Tax Advantage For Data Centers: El Salvador's ICT Innovation Law offers significant tax exemptions for technology companies, including data center operators and tenants. These incentives reduce the total cost of ownership and create a competitive financial advantage for businesses establishing operations in the country.
Natural Disaster Risk
El Salvador has a moderate risk profile, with specific geological and meteorological hazards that demand careful facility selection and disaster recovery planning.
Based on the INFORM Risk Index, El Salvador has a moderate overall risk score of 4.0 out of 10, as of September 2025. The primary natural hazards contributing to this risk are:
- Earthquake: 9.2/10
- Tsunami: 7.6/10
- Coastal Flood: 4.3/10
- Drought: 3.6/10
- River Flood: 3.5/10
The country's position on the Pacific Ring of Fire results in a high risk of seismic activity. Tsunami risk is also significant for any coastal infrastructure. Inland facilities are better insulated from coastal threats but must be engineered to withstand seismic events.
