Data Centers in Montevideo
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Montevideo – The Southern Cone’s Green Power Harbor
Executive Summary
Montevideo is the primary destination for organizations requiring a stable, secure, and sustainable footprint in South America. It offers a reliable alternative to larger regional markets, leveraging a world-class renewable energy grid to ensure operational resilience and predictable growth. This market is a strategic choice for firms prioritizing carbon-neutral operations and regional stability.
Montevideo: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Stable regional performance with growing subsea fiber capacity. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest major cloud on-ramp hub is located in Buenos Aires. |
| Power Cost | $0.13/kWh – as of September 2025 | National grid is approximately 98 percent renewable energy. |
| Disaster Risk | Low (2.7/10) – as of September 2025 | One of the safest infrastructure profiles in South America. |
| Tax Incentives | Yes | Foreign investors access credit on same terms as nationals. |
| Sales Tax | 22% VAT – as of September 2025 | Standard national rate applies to technology services. |
Network & Connectivity Ecosystem
Montevideo serves as a strategic jumping-off point for traffic moving between Brazil, Argentina, and international subsea routes. The market is defined by its stability rather than sheer volume, making it an ideal site for regional redundancy.
Carrier Density & Carrier Neutrality: Carrier count: over 5 – as of September 2025. While the local market is more consolidated than its larger neighbors, it maintains enough path diversity to support mission-critical enterprise workloads. Most facilities offer neutral access to major regional providers.
Direct Cloud On-Ramps: Over 0, enabling access to 0 cloud regions – as of September 2025. There are currently no direct hyperscale on-ramps within the city. Enterprise traffic typically reaches AWS or Google Cloud (GCP) via private transport or software-defined interconnects to Buenos Aires.
Internet Exchange Points (IXPs): The primary exchange is IX.uy, managed by LACNIC and ANTEL. It facilitates efficient local peering to keep domestic traffic within the country and reduce latency for local users.
Bare Metal: High-performance compute options are available through regional specialists such as Latitude.sh. These providers offer low-latency alternatives to traditional colocation for agile workloads.
Power Analysis
The Uruguayan power sector is a global leader in sustainability, providing a unique operational advantage for data center tenants managing ESG requirements.
Average Cost Of Power: Industrial rates are approximately $0.13/kWh as of September 2025. While pricing reflects the high quality of the infrastructure, the true value is found in the generation mix. Approximately 98 percent of electricity comes from renewables, including hydro and wind. This nearly carbon-neutral profile helps corporations meet sustainability targets without purchasing extra offsets.
Power Grid Reliability: The grid is well-engineered and highly reliable, benefiting from significant recent investment in transmission infrastructure. Data center corridors in Montevideo typically utilize redundant feeds from multiple substations to ensure consistent uptime for critical hardware.
Market Access, Business & Tax Climate
Montevideo is the political and economic center of Uruguay, acting as a safe harbor for regional technology investment.
Proximity To Key Business Districts: Data centers are strategically positioned near the World Trade Center Montevideo and the Aguada Park free trade zone. This proximity is vital for the financial services and software development sectors that require low-latency access to their primary compute stacks.
Regional Market Reach: From Montevideo, providers can effectively serve the Uruguayan population and provide high-availability failover services for the larger Buenos Aires metro area, located just across the Rio de la Plata.
Tax Advantage For Data Centers: Uruguay provides foreign investors with access to investment credit on the same terms as nationals, creating a level playing field for infrastructure projects. This framework simplifies capital acquisition and supports long-term fiscal stability for data center operators.
Natural Disaster Risk
Montevideo maintains an exceptionally favorable safety profile for digital infrastructure, with an overall risk score of 2.7 (Low) as of September 2025. The city is geographically stable and avoids the extreme seismic events seen in other parts of the continent.
- River Flood (3.9): The primary natural concern, though risks are generally confined to specific low-lying drainage basins.
- Coastal Flood (3.8): A regional consideration for sites near the Rio de la Plata during extreme storm surges.
- Drought (3.4): Can impact hydroelectric output, though the diversified wind and biomass mix mitigates total energy risk.
- Earthquake (0.1): Seismic activity is negligible, making the city a primary site for disaster recovery for more active regions.
Other hazards such as tropical cyclones and tsunamis are not material risks for this location. All figures are as of September 2025.
