Mayor of Eldorado do Sul, Brazil, Approves Law Enabling the Construction of Latin America's First Data Center City

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Legislation authorizes the development of Scala AI City, with an initial investment of $500 million to spur economic recovery following 2024 floods

ELDORADO DO SUL, Brazil, Dec. 18, 2024 /PRNewswire/ -- Marking a significant milestone for Brazil, the mayor of Eldorado do Sul, Rio Grande do Sul state today signed into law new legislation enabling the construction of Latin America's first data center city. This paves the way for Scala AI City, a government-led initiative in partnership with Scala Data Centers, the leading sustainable hyperscale data center platform in Latin America. The project will transform the region into a global hub for digital infrastructure and Artificial Intelligence (AI).

Municipal Law 5.949/2024 expands the urban perimeter to include the designated area for Scala AI City while simplifying bureaucratic procedures to create a more business-friendly environment for data center operations. The legislation was developed by Eldorado do Sul's Secretariat of Planning, Governance, and Management (Seplan), with support from the municipal Attorney General's Office, the City Council, and the state government, and was approved by local legislators.

The signing ceremony was attended by Mayor Ernani de Freitas Gonçalves, who emphasized the transformative impact of this initiative for both the city and the state. "Eldorado do Sul is taking a decisive step toward the future. This project puts our city on the global map of technological innovation while creating real opportunities for our community," said Gonçalves.

Vice Governor Gabriel Souza also participated, highlighting the hub's importance for the region's socioeconomic development: "This law paves the way for a new era of progress and inclusion for the residents of Eldorado do Sul and Rio Grande do Sul, especially as we rebuild our city after the devastating floods earlier this year."

Other attendees included the state's Secretary of Economic Development, Ernani Polo; the Mayor-Elect, Juliana Carvalho; and City Council representative Claudiomiro Piazza, underscoring the collaboration between municipal and state authorities in making this project a reality.

Representing Scala Data Centers, Luciano Fialho, Senior Vice President of Corporate Development, reaffirmed the company's commitment to sustainability and its positive impact on local communities. "Scala AI City is much more than a technological investment. It's a testament to how innovation can transform lives by creating jobs, training local talent, and promoting sustainable practices," said Fialho.

During the event, Scala Data Centers announced a social initiative furthering its commitment to local communities: the donation of 110 computers to all 13 public educational institutions in the municipality. This program will directly benefit the population by enhancing education and aligning with Scala's mission to foster social and sustainable progress in the regions it serves.

"We are immensely proud of this initiative, which will help revitalize municipal schools, modernize educational resources, and enhance students' learning experiences and engagement. This effort reflects our ongoing commitment to leaving a lasting, positive legacy in the communities where we operate," said Christiana Weisshuhn, Vice President of Marketing and Sustainability.

About Scala AI City

Scala AI City will be Latin America's first data center city, designed to meet the increasing demands of data processing and AI workloads for global enterprises. Announced in September during a signing ceremony at the Palácio Piratini, the seat of Rio Grande do Sul's state government, the project was launched in the presence of Governor Eduardo Leite.

The campus is envisioned as a strategic hub for innovation and sustainability, incorporating circular economy practices and running entirely on certified renewable energy. Additionally, Scala plans to establish educational partnerships and local workforce training programs, positioning Eldorado do Sul as a leading city prepared for the challenges of the digital economy.

With an initial investment of R$ 3 billion (USD 500 million), the project is expected to generate over 3,000 direct and indirect jobs in its first phase, while stimulating a wide ecosystem encompassing energy, construction, telecommunications, and other industries. This will further drive economic development in the region.

The Scala AI City will launch with a 54 MW IT capacity, with the potential to expand to 4.75 GW (4,750 MW) across more than 7 million square meters—an area equivalent to 6,500 football fields. This scale represents a unique opportunity for Brazil to establish itself as a global leader in the technology and AI sectors, with total investments potentially reaching R$ 500 billion (USD 80 billion).

Strategically positioned to attract international AI workloads, the project leverages Brazil's potential for powershoring — exporting clean energy with added value. Scala AI City positions the country as an attractive destination for massive AI workloads, including training and inference, with sub-80ms latency to North America. This comes at a critical time when energy and capacity shortages in the U.S. present growing challenges.

"However, it is crucial that we establish AI regulations that incentivize, rather than discourage, the processing of international AI workloads in Brazil," added Fialho. "We must create an environment that encourages global tech companies to invest here, generating jobs, innovation, and large-scale economic development."

Eldorado do Sul was chosen for its ample energy supply, expansion-ready land, and strategic connectivity to Scala's SPOAPA01 data center in Porto Alegre. This facility benefits from low-latency infrastructure and a prime position for integration with major global hubs. Additionally, the upcoming Malbec submarine cable — connecting São Paulo, Rio de Janeiro, and Buenos Aires and expected to route through Porto Alegre — ensures a distinct competitive edge.

With the approval of Municipal Law 5.949/2024, Scala can now move forward with subsequent phases, including obtaining licenses and authorizations across various governmental levels.

About Scala Data Centers 

Scala Data Centers is the leading sustainable data center platform in the Latin America hyperscale market. Based in Brazil and backed by DigitalBridge, it was developed to meet and exceed the growing demand for digital access in countries like Brazil, Chile, Mexico and Colombia. Scala has one of the largest portfolio of secured power and land in the region, surpassing 1 GW of critical capacity and a highly qualified team of over 1,100 professionals, applying a flexible and innovative approach to delivering state-of-the-art data center infrastructure for Hyperscale customers, cloud and content providers. Our CoE (Center of Excellence) provides customized solutions for each client with mission critical availability, best in class energy and water efficiency, and evolving high densities capable of supporting the Artificial Intelligence workloads. All this is combined with best sustainability practices guided by our ESG (Environmental, Social, Governance) program. 

For more information, visit https://scaladatacenters.com/en/.

SOURCE Scala Data Centers