Dry Drainage City: Major Tech Firms Eye Latin American Data Centers Amid Severe Drought in Brazil

IT is a warehouse resembling the size of 12 football pitches, poised to provide essential employment and development opportunities in the city of Caucaia, northeastern Brazil. Yet, the shelves remain empty. This extensive facility is set to transform into a data center, as designated by TikTok,
になったんです。 English: The first thing you can do is to find the best one to do. part of a
5.5 billion Reais (7.3 billion pounds) project aimed at expanding the global data center infrastructure.

With the increasing demand for supercomputer facilities, Brazil is attracting an array of high-tech companies, buoyed by the AI boom. The selection of Caucaia is strategic. Submarine cables carry data from Fortaleza, the nearby capital of Ceará, to various continents. Proximity to these cables enhances traffic capacity and reduces latency—the response time across the Internet network.

Additionally, Caucaia is home to the
Pecém EPZ, where businesses can produce goods and services for export, benefiting from various tax incentives and streamlined bureaucratic processes.

However, data from Brazil’s disaster digital atlas and integrated disaster information system indicate that Caucaia is also prone to extreme weather events, including drought and heavy rainfall.

Between 2003 and 2024, the city experienced drought-related emergency conditions declared at least once. In 2019, around 10,000 residents were impacted by water shortages. The digital atlas of disasters shows that as reservoirs depleted, water quality diminished, leading to crop failures and challenges in access to basic food supplies.

Data centers consume vast amounts of energy and water to keep supercomputers cool. Nevertheless, public agencies are promoting green construction in drought-affected areas. Caucaia is part of a broader trend.

According to the Digital Disaster Atlas, five of the 22 planned data centers are situated in cities that have faced repeated drought and water scarcity since 2003.

So far, China’s social networks have not been mentioned in Caucaia’s permit application. However, in February, the chief of staff for the state government, Chagas Vieira, confirmed in an interview with local radio stations that discussions were ongoing with Chinese firms, and representatives from TikTok and its parent company ByteDance met with senior officials, including the Vice President and Minister of Development, Industry, Trade, and Services, Geraldo Alckmin.

ByteDance has been approached for comments.

The project is officially led by Casa dos Ventos, a Brazilian wind energy firm that has invested in the data center sector. Mario Araripe, the company’s founder and president, announced last year that he aims to attract major global technology companies like Apple, Amazon, Google, Meta, and Microsoft to fill the facility with computers.

Casa dos Ventos has already secured one of the three required licenses from the state of Ceará. According to the state’s Environmental Supervision (SEMACE), the project received a license for “30m³/day water consumption in closed circuits supplied by Artesian Well.” Specific details have been withheld for commercial confidentiality.

Casa dos Ventos claims it is “committed to transforming Porto do Pecém into a complex of technological innovation and energy transition.”

Projects requiring significant energy, such as data centers, are required to obtain special permission from the Brazilian government. As of 2024, at least seven of the 21 approvals granted by the Ministry of Mines and the Ministry of Energy were linked to data centers.

Casa dos Ventos is also responsible for another data center project currently under state review in Campo Redondo, Rio Grande do Norte, a region that has experienced drought for 14 out of the last 21 years. During the water crisis in 2022, local governments sought federal aid, and water trucks were dispatched to address the demand.

A similar situation is unfolding in Igaporanga, Bahia, where a Brazilian renewable energy company plans to establish two data centers. The city has been in a state of emergency due to drought conditions for 12 of the years between 2003 and 2022. In 2021, about 5,500 people faced rural water shortages.

Transparency regarding water usage by data centers under construction in these areas is lacking. Companies have not disclosed this information voluntarily, and the government has withheld technical documents for licensing, citing commercial confidentiality.

In early April, the National Electric Power System Operator (ONS) denied requests for access to the grid for Casa dos Ventos, citing concerns for grid stability. Consequently, the Ministry of Mines and Energy requested a recalculation to assess potential grid adjustments.

bIG tech firms acknowledge their water consumption in water-scarce areas heightened by AI requirements. The 2024 Sustainability Report details that
Microsoft reported that 42% of its water usage originates in regions experiencing water stress. Similarly,
Google stated that in the same year, 15% of its water consumption fell in areas marked by “high water scarcity.”

Data centers utilize a large volume of water to prevent overheating in computers and machines. However, some water may evaporate, potentially exacerbating the local climate crisis where they are located. As AI technologies evolve, the demand for processing power increases, leading to heightened energy and cooling requirements. Consequently, water and energy consumption are projected to rise.

The International Energy Agency projects a significant increase in
data center energy consumption to double, reaching 945,000 GWh by 2030—equivalent to Japan’s annual energy consumption. Countries like Brazil will account for approximately 5% of this growth within that timeframe.

Water consumption is expected to surge. Researchers from the University of California, Riverside, and the University of Texas at Arlington estimate that global AI demand will require between 4.2 billion and 6.6 billion cubic meters of water by 2027, surpassing half of the UK’s annual water usage.

However, Shaolei Ren, a researcher from UC Riverside and co-author of the study, highlights a crucial distinction between consumption (water extracted from the system) and loss (water evaporated).

“Residential users generally do not withdraw significant amounts of water, but data centers often consume between 60% and 80%,” notes Ren, meaning that much water is lost.

Data centers can be cooled through two approaches: one is air conditioning, a widely adopted method for various facilities, while the second is utilizing water.

One method involves recycling or reusing water but incorporates fans and radiators within closed systems, resembling car engine technologies. Alternatively, a cooling tower might use evaporation to expel heat from heated water, allowing the return of cold water to the system. The final method involves misting water into the air, increasing humidity and reducing temperature.

Nonetheless, these methods are not without inefficiencies. “Both evaporation and misting lead to water loss,” asserts Emilio Franceschini, an associate professor at ABC Federal University.

A small data center with a capacity of 1MW consumes around 25.5 million liters of water annually, with an estimated 1% (255,000 liters) lost to evaporation.

In Pecém, alternatives to extracting water include purchasing desalinated seawater or recycled water from Fortaleza.

It falls upon the state government to grant water concessions to data centers as part of the environmental licensing process.

rOnildo Mastroianni, technical director at Esplar, an NGO with a 50-year presence in Ceará, argues that projects demanding high water consumption in semi-arid areas are misguided. “It’s simply pushing for increased dryness,” he asserts.

Mastroianni cautions that such projects could alter the local hydrological basin, which may weaken fragile ecosystems, like the
Caatinga, and heighten food insecurity due to rural water scarcity. He indicates that representatives from local NGOs and various Kilombola and Indigenous communities were not included in project discussions.

Other Latin American nations are also witnessing a surge in the data center industry.
Chile has launched 22 data centers in the Santiago region alone. In December, the government announced a
National Plan to establish 30 additional projects, projected to place the country at medium to high levels of water stress by 2040, signifying decreased water availability.

In Chile, both governmental and corporate bodies are facing escalating opposition. In 2019, Google disclosed plans for its
second data center in Santiago, which sparked estimates from the activist organization MOSACAT indicating the project would extract 700 million liters of water annually.

Following a wave of protests, a Santiago court reviewed the project. By early 2024, the court
halted Google’s assessments concerning environmental impacts, pending further evaluation.

Among those advocating against the project was
Tania Rodriguez of MOSACAT, who lamented,
“That turned into extractivism,” she said in interviews with other outlets.
“We will become everyone’s backyards.”