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Brazil’s Senate has approved Bill No. 278/2026, advancing the ReData measure that creates the Special Taxation Regime for Data Center Services and sending it to the president for approval.
The symbolic vote took place on Tuesday (the 1st) with no objections. The bill will now move to the president, with notification to the Chamber of Deputies. The source article said the bill will not need to be put to a new vote in the House.
ReData suspends federal taxes for five years on information and communication technology components and equipment intended for authorized data centers. The taxes covered are Import Tax, IPI, PIS/Cofins, and PIS/Cofins-Import, and they are converted into exemptions once required conditions are met.
The program also changes the standard for import reviews, replacing the concept of "no domestic equivalent" with "no equivalent domestic production."
The article said the projected decline starting in 2027 - to R$1 billion (US$200m) in 2027 and R$1.05 billion (US$210m) in 2028 - is tied to the transition of the consumption tax reform, which eliminates the PIS and Cofins taxes and reduces the IPI to zero, with exceptions related to the Manaus Free Trade Zone.
To qualify, companies must meet their entire contractual electricity demand with renewable or low-emission sources, keep water efficiency at or below 0.05 liters per kWh in cooling systems, and publish sustainability reports. They must also invest an amount equal to two percent of the value of the equipment covered by the incentives in research and development, with at least 40 percent of that funding directed to the North, Northeast, and Central-West regions.
Companies are also required to allocate at least ten percent of the installed capacity eligible for incentives to the domestic market. According to the source, that requirement may be met by providing capacity to scientific and technological institutions, government agencies, or through additional investments in research and innovation.
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The bill was approved with drafting amendments Nos. 40 and 41, as well as floor adjustments proposed by rapporteur Senator Cid Gomes (PSB-CE). His report kept the environmental, regional, and research and development provisions previously established by the Chamber of Deputies.
Before the vote, Senators Tereza Cristina (PP-MS), Jaime Bagattoli (PL-RO), and Eduardo Braga (MDB-AM) withdrew requests to highlight specific amendments.
The main disagreement came from senator Laercio Oliveira, who wanted natural gas to be included among renewable energy sources for data centers. The compromise was a drafting revision that avoided naming specific sources and instead required energy from "low-emission" sources, allowing the measure to win unanimous approval.
The legislation had been stalled since Provisional Measure No. 1,318/2025 expired in February. The Chamber of Deputies approved ReData on February 25, but the Senate removed the bill from its agenda that same day, delaying a vote for months amid pressure from companies, associations, and parliamentary caucuses in the sector.
According to the source article, proceedings resumed as part of a joint effort by President Luiz Inácio Lula da Silva, senate president Davi Alcolumbre (União-AP), and house speaker Hugo Motta (Republicanos-PB).
For Victor Arnaud, president of Equinix in Brazil, the approval of ReData represents a decisive step toward making the country more competitive in global investment decisions regarding digital infrastructure
He said the program reduces the cost of introducing new technologies into the country and, in exchange, imposes conditions, such as the use of renewable or low-emission energy, water efficiency, investment in local R&D, and the reservation of capacity for the domestic market.
Pedro Moniz, CEO of Quadrante in Brazil and Chile, added that the approval of ReData is an important step toward creating more favorable conditions for the expansion of data centers in Brazil.
Leonardo Senra, CRO at Omid, said ReData could accelerate the construction of data centers in Brazil. But he warned, more data centers in the country do not necessarily mean greater technological autonomy or digital sovereignty if the incentive primarily serves to bring more capacity to foreign players.
Alex Sasaki, Vertiv’s VP for Latin America, added that the new policy is drawing the attention of leaders from other Latin American countries already seeking to accelerate their own AI agendas. He said that ReData positions Brazil as a model by demonstrating how a country can bring together the necessary capabilities to attract investments in AI-focused data centers, combining the new tax policy with already established factors such as a clean energy mix, a skilled workforce, and a mature digital culture.
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