Data Centers in Montevideo
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Montevideo – A Stable Hub for Southern Cone Digital Services
Montevideo serves as a strategic entry point for businesses targeting the Southern Cone region of South America. Its combination of extremely low natural disaster risk, favorable tax policies for foreign investment, and a power grid dominated by renewable energy makes it a reliable and sustainable choice for colocation and edge deployments. This market is ideal for companies prioritizing operational stability and cost-effective access to Uruguay and neighboring countries.
Montevideo: 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 | Nearest hubs are in São Paulo or Santiago for private cloud access. |
| Power Cost | UYU $5.50-7.00/kWh (est.) | Uruguay's grid is nearly 98% renewable, ensuring price stability and sustainability. |
| Disaster Risk | Low (2.7/10) – as of September 2025 | One of the safest locations in the region from natural disasters. |
| Tax Incentives | Yes | Foreign investors can access credit on the same terms as nationals. |
| Sales Tax | 22% VAT – as of September 2025 | The standard Value Added Tax rate for goods and services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Data centers in Montevideo provide access to a solid ecosystem of national and international carriers. While exact numbers vary, the market supports a competitive environment sufficient for resilient primary and backup connectivity strategies as of September 2025.
Direct Cloud On-Ramps: Montevideo has 0 direct cloud on-ramps and 0 cloud regions locally as of September 2025. Businesses requiring dedicated, low-latency connections to major cloud providers must establish private network links (PNI/wave) to major hubs like São Paulo, Brazil or Santiago, Chile.
Internet Exchange Points (IXPs): The primary IXP is IXP.uy (CABASE), which facilitates local traffic exchange and improves latency for domestic users. Most international peering, however, is routed through larger regional exchanges or directly via carrier transit.
Bare Metal: Bare metal server options are available in Montevideo, providing a necessary alternative to public cloud infrastructure. Providers like Latitude.sh offer dedicated server solutions for workloads that demand high performance and security.
Power Analysis
Average Cost Of Power: Industrial electricity costs are estimated between UYU $5.50–$7.00/kWh as of September 2025. Uruguay's power grid is distinguished by its reliance on approximately 98% renewable sources, primarily hydroelectric and wind, which contributes to long-term cost stability and helps meet corporate sustainability goals.
Power Grid Reliability: The power grid supporting Montevideo's primary business districts is reliable and well-engineered. The significant investment in renewable energy sources provides a stable and consistent power supply, crucial for maintaining data center uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in and around Montevideo are strategically located to serve the city's financial district and the growing technology parks at Zonamerica and Parque de las Ciencias. This proximity ensures low-latency connectivity for finance, software development, and shared services industries.
Regional Market Reach: Montevideo is well-positioned to serve not only Uruguay's 3.5 million people but also act as a disaster recovery or secondary site for businesses in Argentina and Southern Brazil. Its political and economic stability makes it a safe harbor in the region.
Tax Advantage For Data Centers: Uruguay offers significant incentives for foreign investors. The government provides equal access to investment credits and financial instruments, reducing the capital expenditure required to establish a digital presence. These policies are designed to attract technology investment and simplify market entry.
Natural Disaster Risk
Montevideo has a very low natural disaster risk profile, with an INFORM Risk score of 2.7 out of 10 as of September 2025. This rating reflects the country's stable geography and climate, making it one of the most secure locations in Latin America for critical infrastructure.
Key environmental risks include:
- River Flood: Rated at 3.9, representing a manageable risk primarily in specific low-lying areas.
- Coastal Flood: Scored at 3.8, a consideration for infrastructure located directly on the coastline.
- Drought: At 3.4, this risk can impact hydroelectric power generation but is mitigated by a diverse energy mix.
- Earthquake & Tropical Cyclone: Risks are negligible, with scores of 0.1 and 0 respectively.
