Data Centers in Panama

Panama – Strategic Hub for Latin America

Panama serves as a critical colocation and interconnection point for businesses targeting Central America, the Caribbean, and South America. Its unique geographic position, combined with a stable business environment, makes it an essential location for reducing latency and improving application performance across the region. For companies that require a strategic foothold between North and South America, Panama provides a reliable and well-connected base of operations.

Panama: At A Glance

Network & Connectivity Ecosystem

Panama's connectivity is defined by its status as a major crossroads for subsea fiber optic cables connecting North and South America.

Carrier Density & Carrier Neutrality: With 3 distinct providers operating 8 data centers, the market offers foundational carrier-neutral options, as of September 2025. The ecosystem is growing, providing access to key regional and international networks.

Direct Cloud On-Ramps: There are no public cloud on-ramps located directly within Panama. Businesses connect to cloud providers like AWS, Google Cloud, and Microsoft Azure via the nearest major hubs, primarily located in Miami, Florida. Secure, private connections can be established through dedicated circuits and PNI arrangements.

Internet Exchange Points (IXPs): The Panama Internet Exchange (PA-IX) is the primary IXP in the country. It facilitates local traffic exchange between carriers, reducing reliance on international links for in-country data transit and improving local performance.

Bare Metal: Bare metal server options are available, providing dedicated compute resources for workloads that demand high performance and security. Providers such as Latitude.sh offer deployments in Panama for latency-sensitive applications targeting the region.

Power Analysis

Panama's power infrastructure is a significant asset, characterized by a high percentage of renewable energy and a reliable grid.

Average Cost Of Power: Industrial electricity prices generally range from $0.15 to $0.21 per kWh, as of September 2025. This cost structure, influenced by a hydro-dominated generation mix, provides a predictable operating expense for high-density deployments.

Power Grid Reliability: The national grid is well-maintained, especially in the metropolitan areas where data centers are located. The reliance on hydroelectric power (over 50% of the mix) contributes to grid stability, though fossil fuels provide necessary capacity during peak demand.

Market Access, Business & Tax Climate

Panama offers a strategic location with a pro-business environment, making it an effective hub for regional operations.

Proximity To Key Business Districts: Data centers are located near Panama City's International Business Park and the city's financial district. This proximity provides low-latency connectivity to the country's primary economic and logistics centers, including those supporting the Panama Canal.

Regional Market Reach: From Panama, organizations can effectively serve markets across Central America and the Caribbean. Its central location minimizes latency to neighboring countries, making it a strong choice for content delivery, financial services, and logistics applications.

Tax Advantage For Data Centers: The country does not offer specific tax incentives for data center development or foreign investment in this sector. The primary financial benefits stem from Panama's overall territorial tax system and its stable economic climate.

Natural Disaster Risk

Panama has a low overall risk profile for natural disasters, with an INFORM Risk score of 4.1 out of 10, as of September 2025. While the general threat is minimal, operators should account for specific regional hazards.

The most significant natural risks include:

• Tsunami: 8.5/10
• Earthquake: 7.8/10
• Coastal Flood: 5.9/10
• Epidemic: 6.2/10
• Drought: 1.2/10

Tropical cyclone risk is negligible, a key advantage compared to other locations in the region.