Private equity investments are also being stimulated by AI's high energy demands, with Latin America's low production costs and clean energy availability being advantageous. Recent reforms in Brazil are expected to further boost investments by reducing taxes on essential AI components. Infrastructure bonds in Brazil have surged, driven by data infrastructure and renewable energy projects. Additionally, private equity funds are eyeing opportunities in roads and sanitation concessions, with significant investments anticipated in Brazil and Colombia. The region's role as a global provider of food and minerals further enhances its appeal to investors.
Key takeaways:
- Infrastructure investors are increasingly focusing on Latin America due to its renewable energy resources and government incentives, particularly in data centers for AI and cloud computing.
- Private equity investments in Latin American infrastructure reached $11.7 billion in the first three quarters of last year, more than doubling the total for all of 2023.
- Major tech companies like Microsoft, Amazon, and Google are expanding their data centers in Latin America, with new investments exceeding $9 billion last year.
- The data-center market in Latin America is expected to double by 2029, driven by data localization rules and near-shoring to the US economy.