Data Centers in Canelones
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Canelones – Stable Power for South American Operations
Canelones, Uruguay offers a stable and secure location for data center operations focused on the Southern Cone of South America. Its exceptionally low-risk profile for natural disasters and a power grid dominated by renewable energy provide a reliable foundation for mission-critical infrastructure. This makes it a strong choice for companies prioritizing uptime and environmental sustainability for their deployments in the region.
Canelones: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Good regional connectivity, though direct global links are limited. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network extension from hubs like São Paulo or Buenos Aires. |
| Power Cost | UYU $5.50-7.00/kWh | Sourced from a grid with approximately 98% renewable generation. |
| Disaster Risk | Low (2.7/10) | One of the safest locations globally for natural hazards. |
| Tax Incentives | Yes | Foreign investors can access credit on the same terms as nationals. |
| Sales Tax | 22% VAT | Standard national value-added tax rate, as of September 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: The market is served by over 10 national and regional carriers as of September 2025. While smaller than primary hubs, there is sufficient competition to ensure service diversity in the single carrier-neutral facility.
Direct Cloud On-Ramps: There are no direct cloud on-ramps located in Canelones. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure through private network extensions or IP transit to major hubs such as São Paulo, Brazil.
Internet Exchange Points (IXPs): Peering is primarily handled through private interconnection within the main data center or via the national IXP in Montevideo, which centralizes traffic exchange for the country.
Bare Metal: Bare metal server options are available, though often provisioned from nearby regional hubs. Providers like Latitude.sh offer compute solutions that can serve the Uruguayan market with low latency.
Power Analysis
Average Cost Of Power: Industrial electricity costs are estimated to be between UYU $5.50 and UYU $7.00 per kWh as of September 2025. This pricing, combined with a green energy mix, offers predictable operational expenses for environmentally conscious companies.
Power Grid Reliability: Uruguay's power grid is exceptionally reliable, drawing approximately 98% of its electricity from renewable sources, primarily hydroelectric and wind. This energy profile contributes to stable and predictable power delivery, with well-engineered infrastructure supporting key commercial zones.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Canelones are strategically located to serve the Montevideo metropolitan area, which includes the capital's financial district, port, and growing technology sector. This proximity provides low-latency access for local enterprises.
Regional Market Reach: From Canelones, businesses can effectively serve the entire population of Uruguay and extend reach into neighboring markets in Argentina and southern Brazil. The country's stable political and economic environment makes it a secure base for regional operations.
Tax Advantage For Data Centers: Uruguay provides a favorable investment climate for foreign and domestic companies. The primary benefit is a general investment promotion law that allows the government to grant tax exemptions for qualifying projects, reducing the overall cost of capital expenditure.
Natural Disaster Risk
Canelones has a very low natural disaster risk profile, with an INFORM Risk score of 2.7 out of 10 as of September 2025. The area is not prone to significant seismic or severe weather events, making it an ideal location for critical infrastructure requiring maximum uptime.
Key environmental risks include:
- River Flood: The most significant natural hazard, though still rated as a low to moderate risk.
- Coastal Flood: A secondary concern for areas near the Río de la Plata estuary.
- Drought: Periodic drought conditions can impact the region, primarily affecting agriculture.
- Earthquake: Seismic activity is negligible, with a risk score of 0.1.
- Tropical Cyclone: The region is outside the typical path of tropical cyclones.
