Data Centers in Palestine
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Palestine – Foundational Digital Infrastructure
Executive Summary
Palestine's digital infrastructure market is in a nascent stage, primarily serving local businesses, academic institutions, and NGOs. For organizations focused on delivering services directly within the West Bank and Gaza, establishing a local presence is essential for performance and availability. The environment requires careful planning around power and connectivity resilience to ensure uptime.
Palestine: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Connectivity is functional but lacks the diverse, low-latency routes of major hubs. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | No direct on-ramps exist. Access is via regional hubs like Tel Aviv. |
| Power Cost | ₪0.55-₪0.70/kWh (est.) | Industrial electricity costs are higher than in many regional markets. |
| Disaster Risk | High (6.4/10) | Primarily driven by non-natural factors; natural hazard risk is moderate. |
| Tax Incentives | No | No specific data center tax incentives are available as of September 2025. |
| Sales Tax | 16% VAT | A standard Value Added Tax applies to most goods and services. |
Network & Connectivity Ecosystem
The connectivity landscape in Palestine is developing, characterized by a dependence on international links through neighboring countries.
Carrier Density & Carrier Neutrality The market has a limited number of service providers, with two primary data centers available as of September 2025. True carrier neutrality is not yet a mature feature of the market, with most connectivity options tied to a few key national telecom operators.
Direct Cloud On-Ramps There are no direct cloud on-ramps located within Palestine. Businesses requiring dedicated cloud access must use private network extensions or IPsec VPNs to connect to cloud provider points of presence in nearby hubs, such as Tel Aviv, Israel.
Internet Exchange Points (IXPs) Public peering is not well-established. Most traffic is exchanged via private peering arrangements or transits through international carriers, impacting latency for local traffic.
Bare Metal Bare metal server availability is limited. For dedicated compute, organizations typically rely on providers with a presence in the wider Middle East region, such as OVHcloud or Leaseweb, and manage the connectivity back into Palestine.
Power Analysis
Power infrastructure presents significant operational challenges and must be a primary consideration for any deployment.
Average Cost Of Power The estimated cost for industrial power ranges from ₪0.55 to ₪0.70 per kWh as of September 2025. This rate is relatively high for the region and can impact the total cost of ownership for significant deployments.
Power Grid Reliability The national power grid experiences frequent inconsistencies. Data center operators and tenants must plan for substantial on-site power generation and battery backup systems to achieve reliable uptime.
Market Access, Business & Tax Climate
The market is geared toward serving the immediate domestic population and local enterprises.
Proximity To Key Business Districts Data center facilities are situated to serve the main economic and administrative centers, including Ramallah. Proximity enables lower latency for government services, financial institutions, and local software companies.
Regional Market Reach The market's primary focus is serving the Palestinian territories. Due to geopolitical and infrastructure constraints, it is not positioned as a hub for broader regional service delivery.
Tax Advantage For Data Centers There are no specific tax incentives or advantages for data center development or operation. Businesses should plan for a standard corporate tax environment and a 16% Value Added Tax on services.
Natural Disaster Risk
Palestine has a high overall risk profile (6.4/10), according to the INFORM Risk Index as of September 2025. This rating is heavily influenced by human and institutional factors rather than natural disasters.
The primary natural hazards of note are:
- Earthquake Risk: The region has moderate seismic activity, with a risk score of 4.7.
- Epidemic Risk: The potential for epidemics scores a 4.1, reflecting underlying vulnerabilities.
- Tsunami Risk: A low but present risk for coastal areas scores 0.9.
Risks from river floods, tropical cyclones, coastal floods, and drought are rated as negligible.
