Paraguay: An Emerging Market for Data Centers with Regional Strategic Potential

The data center market in Paraguay is undergoing a period of development and growth. Although current infrastructure is limited, the country's structural conditions—such as its low-cost renewable energy, incentives for foreign investment, and strategic geographic location—position it as an ideal candidate to become a regional digital hub.

Currently, Paraguay has an estimated installed capacity of just 1 to 2 megawatts (MW) for data centers available to the business sector. This figure excludes both cryptocurrency mining operations—which can exceed 50 MW—and the internal facilities of banks and public agencies.

The main operational centers are:

• Tigo Business (Villa Elisa): The only Tier III-certified data center in Paraguay, offering colocation and business continuity services.

• IPXON Asunción 1 and 2: structures equivalent to Tier III, although they do not have official certification.

  
  

This capacity is insufficient even to cover a minimum functional base, estimated at 3 to 5 MW in 2025. Countries with similar characteristics, such as Uruguay, already have this scale. In digital growth scenarios, Paraguay will require between 5 and 10 MW by 2027, and up to 20 MW if it positions itself as a regional edge computing and disaster recovery service provider for Mercosur.

Why is the need for data centers growing?

Paraguay is experiencing a significant expansion of its digital business ecosystem. Several sectors are experiencing accelerated growth rates, increasing the demand for technological infrastructure. The software market is projected to grow by 5.68% annually until 2029. Digital commerce is projected to grow by 22.69% annually until 2029, while e-commerce revenue is projected to increase by 9.64% annually to reach USD 2.27 billion in 2029. Enterprise software is projected to grow by 7.04% annually, and digital investments are projected to increase by 6.75% annually. Furthermore, the digital health sector is projected to grow by 49.17% between 2024 and 2029. This dynamic of digital expansion is putting direct pressure on the need for modern and secure data centers within the country.

The digital transformation experienced by businesses, the public sector, and society in general is driving unprecedented demand for data storage, processing, and security. This phenomenon is fueled by the rise of e-commerce and remote work, which require fast connections and low-latency cloud services.

Added to this is the digitalization of the state and the financial system, which require stable, scalable, and secure platforms to operate efficiently. Furthermore, the growth of the data-driven economy demands that companies make decisions in real time, which requires infrastructure capable of ensuring high availability and redundancy.

Finally, the need for digital sovereignty is becoming increasingly urgent, as relying on foreign servers to manage sensitive or strategic information entails technological and geopolitical risks. A modern data center allows for hosting business servers and applications in controlled environments, with redundant power, specialized cooling, and high-level physical and digital security. In this sense, data centers become a critical component of the economic infrastructure of any country aspiring to integrate into the global digital economy.

Latent demand and infrastructure leakage

Currently, most large Paraguayan companies and SMEs host their digital infrastructure in data centers in Brazil or Argentina due to the scarcity of local options. This leakage represents a loss in digital sovereignty, business opportunities, and real estate investment. It is estimated that if only 20% of this demand were repatriated, the country would need between 2 and 4 MW of additional installed capacity.

Despite the growth of cloud services—which will reach USD 155.5 million by 2025, with an estimated 19% annual growth rate through 2029—the physical data center market remains significant, with projected revenues of USD 83.85 million by 2024, according to Statista. Many companies still require hybrid solutions or on-premises infrastructure for reasons of latency, security, or regulatory compliance.

Structural conditions that favor investment

Paraguay offers one of the most competitive energy rates in Latin America, with industrial prices between USD $0.03 and $0.05 per kWh, and a 100% renewable energy matrix based on hydroelectric generation (Itaipu and Yacyretá). This is complemented by a 4G network with full national coverage and a projected average connection speed of over 53,000 kbps by 2025.

Furthermore, the government is promoting public policies and incentives to attract technological investment. An example of this approach is the construction of the first state-owned data center, led by SENATICs, which will house critical state infrastructure in Asunción. Although still under development, this project aims to guarantee digital sovereignty and reduce dependence on foreign infrastructure.

An opportunity for the real estate and technology sectors

The evolution of the data center market represents a concrete opportunity for the local real estate sector: demand will increase for land suitable for technological use, with good fiber optic connectivity, reliable electrical access, and efficient cooling conditions. The cities of Asunción and regions near hydroelectric dams, such as Hernandarias, are emerging as strategic hubs.

Conclusion: a nascent market with high potential

The data center market in Paraguay is still in its infancy, but the foundations for expansion are solid. With planning, investment, and public-private partnerships, Paraguay has the potential not only to close its internal digital divide but also to become a key regional player in technological infrastructure.

For real estate investors, operators, and developers, the time to explore this sector is no