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Lula sanctions this Tuesday project that creates incentives for data center installation in BrazilPhoto by panumas nikhomkhai on Pexels
Business
Energy

Lula sanctions this Tuesday project that creates incentives for data center installation in Brazil

extra15 September 2026 at 12:33

President Luiz Inácio Lula da Silva sanctioned this Tuesday (15) the bill that establishes the incentive plan for the data center sector in Brazil. The text was approved by the Chamber of Deputies in February and by the Senate earlier this month, after a period of impasse. The project was unblocked after a meeting between Lula and the president of the Senate, Davi Alcolumbre (União Brasil-AP), at the end of August.

The project, called the Data Center Sector Incentive Program, establishes that companies in the sector must contract all of their electricity demand through supply contracts or self-production from renewable or low-emission sources. Senators included the term "low emission" in the text to allow data centers to also contract natural gas energy.

Through the REDATA program, companies in the sector may have suspension and subsequent reduction to zero rate of taxes such as IPI, PIS/Pasep, Cofins and Import Tax on the acquisition and import of information and communication technology equipment. The program's objective is to attract investments to the technology sector in the country.

Why this matters

The measure may attract new investments to the technology sector in the country, potentially generating jobs and economic development. For companies wishing to install data centers in Brazil, the tax incentives represent a significant reduction in operational costs. The clean energy requirement aligns the program with the government's environmental goals.

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