Scala unveils plans to create US$50bn datacenter complex in Brazil's south

Scala Data Centers unveiled plans to develop a complex that could reach US$50bn in investments, part of a multiple-building campus in Rio Grande do Sul state that is set to become one of the biggest in the Southern Hemisphere.

Located in the city of Eldorado do Sul, just to the west of state capital Porto Alegre, the entire project could involve investments of as much as US$120bn over two decades, considering expansions and direct and indirect investments in energy and other aspects, including from third-parties, according to the company.

Initially, however, the first phase of the campus will involve investments of 3bn reais (US$544mn) and capacity of 54MW. This is the amount that the company is commiting to.

“This capacity is almost seven times the combined capacity of all datacenters operating in Rio Grande do Sul,” said CEO Marcos Peigo at an event in Porto Alegre alongside governor Eduardo Leite.

The entire campus is expected to have a capacity of 4.75GW. As an indication of its scale, the current installed capacity of all datacenters in Brazil is only 700MW.

Scala has a datacenter in the state, called SPOAPA01.

Located in Porto Alegre and launched in December 2023 with an investment of 240 million reais (US$42mn), the site was Scala’s first datacenter in southern Brazil. 

Largely focused on connectivity, SPOAPA01 has 4.8MW in IT capacity and still has idle capacity to be leased, BNamericas has learned.

SOUTHERN CONE HUB

Meanwhile, the Eldorado do Sul campus project, located 32km from the Porto Alegre site, will focus on high-performance computing and AI.

Scala doesn't consider it a traditional campus, but rather a datacenter city because the complex is projected to have facilities such as accommodation, commercial establishments, gyms and interior roads for the first time in one of the company’s projects.

In the first phase, Scala expects the project to generate 80,000 direct and indirect jobs, 20,000 of which will be in the civil construction works.

Scala aims to prioritize local suppliers and workers. The state has committed to working with universities to train specialists in the sector.

From a data perspective, Scala’s goal with the “datacenter city” is to create a connectivity hub in the country's south, taking advantage of the international submarine cables that arrive in the state, as well as the existing terrestrial fiber networks, to serve other countries in the region.

“I tried to convince my board a few times to invest in Argentina, to buy companies there, without success. The idea of the project is also to serve the Southern Cone,” Peigo said at the event.

Although it had been in the works since last year, the project officially began moving forward on March 12, after a phone call between Peigo and Leite.

Economic development secretary Ernani Polo said that he learned last year that Scala planned to invest in Rio Grande do Sul. Leite was informed and asked that the project be given full attention.

The floods in the state earlier this year raised concerns about the possibility of impacts on the site chosen for the datacenter complex, but it was not affected.

However, Scala’s existing datacenter in Porto Alegre, as well as those of other companies in the sector, were affected and had to shut down temporarily, as reported by BNamericas.

Operations have now been fully restored after a 68-day interruption.

ENERGY

Scala's team mapped almost 12GW of power in the transmission lines installed in Brazil available for use. In Rio Grande do Sul, in particular, this unused transmission capacity would be greater.

“There is a lot of underutilized transmission capacity in Rio Grande do Sul,” said Peigo.

As with other company projects, Scala states that 100% of the energy to power the campus will come from renewable sources through PPAs with companies in the sector.

Scala’s main renewable energy partners are Engie and AES.

“We postponed our investments in Mexico because we couldn’t access renewable energy, such is the importance of this issue for us. We’re now heading to Querétaro and will soon announce news there,” Peigo said at the event.