Paraguay Attracts Data Center Investments with Low Energy Costs and Tax Incentives
Paraguay is becoming a prime destination for multinational data centers, driven by low energy costs and attractive tax incentives. Notably, X8 Cloud plans to invest $50 million to construct the largest AI data center in the Southern Hemisphere by 2026, leveraging energy from the Itaipú Dam. While interest in technology projects is rising, local entrepreneurs are calling for clearer regulatory frameworks and long-term contract assurances.
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Paraguay is emerging as an attractive location for multinational data centers due to low energy costs and tax incentives. In December, X8 Cloud announced a $50 million investment over 30 years to build the largest AI data center in the Southern Hemisphere, utilizing energy from the Itaipú Dam shared with Brazil, with construction set to start in 2026.
Boost Engenharia is also considering a similar project, having signed a memorandum of understanding with the National Electricity Administration. Paraguay's energy conditions improved after settling its debt in 2023 and renegotiating an agreement with Brazil, allowing it to sell energy freely. Interest in cloud services, finance, and blockchain projects is growing, though local entrepreneurs emphasize the need for clearer regulatory standards and long-term contract guarantees.
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