In a recent discussion, datacenterHawk's Regional Director for the Americas, Steve Sasse, sat down with Pablo Amarelle, General Manager of Zonasur, to explore the burgeoning data center landscape in Argentina. The conversation provided a detailed analysis of why Argentina, despite being the third-largest economy in Latin America, has lagged in digital infrastructure and how recent shifts are positioning it for significant growth. Amarelle offered an insider's perspective on the unique advantages of the Bahía Blanca region and the strategic role of Zonasur's free trade zone in attracting large-scale investment.
Historically, Argentina's digital infrastructure development has been hindered by economic instability, high inflation, and capital controls. Amarelle explained that these factors created uncertainty, which is detrimental to the long-term, capital-intensive nature of data center projects. However, a new political and economic landscape is changing perceptions. With capital controls being lifted and growing geopolitical support, investors are now viewing Argentina as a prime opportunity for growth, ready to address the existing lack of modern infrastructure.
A significant portion of the discussion focused on the strategic benefits of developing data centers in Bahía Blanca. Amarelle highlighted two key differentiators: power availability and the free trade zone (FTZ) tax regime. Bahía Blanca is an "exporter node" of electricity, generating over two gigawatts and poised for more with upcoming wind farm projects. This local abundance of power mitigates transmission bottlenecks seen elsewhere. Furthermore, operating within the Zonasur FTZ exempts data centers from a 27% value-added tax on energy and eliminates import duties on equipment, providing immense cost savings and certainty for investors.
Addressing another critical infrastructure pillar, Amarelle confirmed that Bahía Blanca is a major connectivity hub. It serves as a node for multiple carriers, with redundant fiber routes connecting to Buenos Aires and the subsea cable landing station in Las Toninas. The latency to Buenos Aires is an impressive 5.5 to 7 milliseconds, making it a viable location for latency-sensitive applications. This combination of robust power, a favorable tax structure, and strong connectivity positions the region as an ideal alternative to congested primary markets, allowing developers to scale efficiently.
The dialogue between Sasse and Amarelle painted a compelling picture of a market at a turning point. For data center operators and investors, Argentina represents a market with untapped potential, a highly skilled workforce, and a growing knowledge economy. The strategic groundwork laid by organizations like Zonasur in Bahía Blanca provides a clear, de-risked path for entry, offering the power, connectivity, and financial incentives necessary to support the next wave of digital infrastructure development in Latin America.
Overcoming Past InstabilityThe Power and Tax Advantage of Bahía BlancaConnectivity and Strategic Location