Why optimism reigns in Mexico's datacenter industry

Mexico's booming datacenter industry will receive US$9.19bn of direct and US$27.6bn of indirect investments over the next five years, according to a study carried out by local association MEXDC.

Home to 26 of 103 initiatives worth over US$50mn included in the BNamericas projects database, Mexico is the second largest datacenter investment market in Latin America.

The MEXDC study said there are 109 datacenters operating and another 21 in the construction phase. Seven more have been announced for the next five years.

Local datacenters are estimated to consume 112MW, while those in the construction phase will require 476MW and the announced infrastructure will demand 1,017MW.

Adriana Rivera, executive director of MEXDC, tells BNamericas about the market situation and the next steps this promising industry will take.

BNamericas: Considering the latest data MEXDC published on the Mexican datacenter market, what are your expectations?

Rivera: This [study] is a very conservative estimate because we're taking into account the companies that are already investing in Mexico, that have announced an expansion or growth and know the challenges regarding energy, regulation, connectivity, infrastructure.

However, due to artificial intelligence, the metaverse and the internet of things, the capacity of datacenters globally will have to increase fivefold. So, this projection that we're making today is without taking all this into account.

BNamericas: Aside from Querétaro, are there other locations with high potential to deploy this type of infrastructure?

Rivera: The Bajío area [which includes Querétaro] offers many benefits. It has commonly been an area of industrial development, there has been commercial openness by local governments and willingness to strengthen infrastructure. So, Bajío is very robust regarding road infrastructure and even dry ports; there is fiber, communications, there is everything.

It would be fabulous to go to Chiapas because there is a lot of energy but it's not that easy, we need to have communication infrastructure.

Bajío, furthermore, experiences hardly any tremors. The ground is very firm, there are no hurricanes, there are not so many floods. It's a safe place to invest. There is also not as much humidity, and that implies a significant reduction in energy consumption.

However, speaking with the government, [electric power utility] CFE and the ministries of economy and communications and infrastructure, they have asked us to create another similarly important development pole. Our answer was yes, of course, but we have to generate connectivity in that area.

Today, the problem in Bajío is that the electric power grid no longer has sufficient capacity, we have to invest a lot.

BNamericas: What other areas are being evaluated for datacenter development?

Rivera: None have been defined yet, but states such as Aguascalientes, Mexico state, Hidalgo, even Veracruz have been mentioned. There is no certain roadmap yet.

We're also doing the same as in Jalisco or Nuevo León [where projects exist], but we have the same situation; they are very pro-industry and have adequate connectivity.

Therefore, the government has told us to do medium-term planning.

BNamericas: Could the presidential elections slated for June 2 have any influence?

Rivera: We're confident. The two [candidates] have extensive professional experience and we believe they will be able to understand the industry and provide support.

We believe we won't have to raise our hands. We did an analysis of the proposals, how they think and both are committed to technology and the digitization of processes. They are betting on modernizing Mexico.

BNamericas: How easy is access to skilled labor in the industry?

Rivera: Nearly 24,000 direct jobs are estimated to be created, and 68,198 in the construction and operation process of the more than 73 new datacenters to be built over the next five years.

The truth is that datacenters are operating with professionals who are literally learning on the job. But this will no longer be the case and we're precisely opening communication channels with educational institutions now that we need professionals at the undergraduate level but also technicians.

We have signed agreements with Universidad Politécnica de Querétaro and Universidad Autónoma de Querétaro. We have directly trained more than 200 students.

BNamericas: One of the topics mentioned as a work area is energy. What is the role of datacenter companies in this regard?

Rivera: We have expressed our interest in being able to generate beyond the megawatts the law permits. That self-generation is for self-consumption.

Mexico's energy generation area is very strong. There is no shortage of energy but the distribution channel and transmission channel are very weak. So what we're doing now is in coordination with CFE and [grid control center] Cenace to see if we can increase energy capacity through the construction of private infrastructure.

In general, they give you permission and oblige you to do works for CFE. And we're doing it, thus strengthening the national electrical system.