ABB sees a "short circuit" in the infrastructure, but is plugging in investments for data centers.

Brazil is on the radar of the Swiss electrification giant ABB. The scenario presents opportunities for the company, especially in the installation of data centers . The company has prepared a US$45 million investment cycle in the country, for portfolio expansion and operational improvements at its factory in Sorocaba, São Paulo.

Last year, the company recorded 9% growth in Brazil, explained by the increased need for electrification in the productive sector and the pursuit of sustainable energy efficiency. The company does not disclose revenue by country, but Brazil is in the top 10 of ABB's main markets.

The electrification unit, which accounts for half of the company's revenue, includes initiatives such as building automation and the installation of power systems in data centers. And it is this segment that will receive the majority of the company's investments.

“There is room for growth in the Brazilian market for automation with renewable energy and in data centers, driven by advances in artificial intelligence and the increase in transactional data. Today, this segment already accounts for 10% of electrification orders in the country's revenue,” says Luciano Nassif, CEO of ABB in Brazil, in an interview with NeoFeed .

Data from the global consulting firm Data Center Map shows that there are currently 206 data centers operating in 34 cities in Brazil. São Paulo leads with 59 facilities, followed by Rio de Janeiro with 24, and Porto Alegre with 14. And this market is expected to sustain revenue growth this year.

“We are forecasting single-digit growth this year. There is scale in Brazil, especially when we look at the growth of segments such as the financial market and e-commerce platforms. The country is among the largest in the world in terms of data transacted. And this will increase,” he explains.

In his assessment, there are even ways for Brazil to export data transfer services to countries in Africa and Latin America, mainly from data centers located in the Northeast. Fortaleza, for example, has 12 such facilities.

“This is an attractive factor for the development of this market. The cost of electricity is an extremely expensive component for this equipment. And with renewable energy, Brazil offers more advantageous conditions,” says Nassif.

And it is precisely in Ceará, at the Port of Pecém, that ABB has also been expanding its operations, installing infrastructure for electrical substations, in addition to projects in São Paulo.

However, along with the opportunities outlined, there are concerns that could affect the advancement of this market in Brazil. The main one relates to the delay in advancing, in the National Congress, the bill that establishes the Special Tax Regime for Data Center Services (Redata). The initiative is still far from being approved.

“This could delay investments. The level of demand, driven by artificial intelligence, is high. The entire market wants all this regulation defined as quickly as possible,” says the executive.

In February, the federal government's provisional measure (MP) that dictated the rules and guaranteed tax benefits for the installation of data centers in the country expired. The Chamber of Deputies then approved a bill reinstating the measure, but the Senate did not discuss the bill, and there is not even a date for a vote in the plenary. Now, with the proximity of the election period, there is a real risk that the measure will only move forward next year.

“This delay is indeed a concern. If there is a defined regulation, which is what the entire market expects, this pace of investment will accelerate in Brazil. This lack of an approved project will cause delays, but I understand that for now it will not paralyze the market,” says Nassif.

Slow progress of power lines

Another concern raised by the ABB CEO is the mismatch between the federal government's progress in electricity transmission infrastructure in Brazil and generation, which has grown in recent years, mainly in wind and photovoltaic systems.

“When we talk about data center infrastructure, it’s fundamental that there is power availability. And how that power will be supplied. These are relevant points that impact the progress of investments. The faster we stabilize our electricity grid, the faster these projects will move forward,” says Nassif.

According to the National Electric Energy Agency, Brazil reached 217,900 megawatts (MW) of monitored power capacity in March. Of this volume, 84.73% comes from renewable power plants. Half is hydroelectric, followed by thermoelectric, wind, and solar.

The fact is that, today, existing transmission lines are not sufficient to transport all the energy produced in Brazil. Currently, there are 176,000 kilometers of lines, with growth of less than 30% in six years. However, wind power capacity, for example, has doubled in the same period. This imbalance, according to Nassif, is a bottleneck for the company's project expansion.

In this sense, he understands that the potential auction for battery energy storage, which should have its bidding process launched in the coming weeks, is a window of growth for ABB.

“We are evaluating how the company will participate in this market. Indirectly, ABB will participate by offering infrastructure to companies that may be involved in this process. This is a good way to take advantage of energy that is currently being wasted,” says Nassif.

One of the paths being studied is through subcontracts with the winning concessionaires of the bidding process. But there is also a point of concern regarding curtailment , the forced interruption resulting from the lack of capacity of the national system to receive all this load.

In another segment, according to Nassif, ABB is less concerned about growth, namely the advancement of electric vehicles in Brazil. Unlike the American market, where automakers are registering accounting losses due to falling sales, Brazilian consumers have embraced this product.

According to the Brazilian Electric Vehicle Association (ABVE), hybrid and plug-in hybrid vehicles are expected to represent 15% of the Brazilian market by 2026. Last year, electrification grew by 26%. With more battery-powered cars, there is a greater need for chargers at stations and in buildings.

In the first quarter of 2026, ABB recorded US$11.3 billion in order volume globally, a 32% increase over the same period in 2025. Net revenue for the period was US$8.7 billion, an 11% increase.

The Americas were the fastest growing continent during the period. The region, which accounted for US$3.4 billion of revenue, grew by 21% during this time. Europe grew by 17% (US$2.9 billion), followed by Asia, the Middle East, and Africa, which increased by 16% (US$2.3 billion).

On the Zurich Stock Exchange, ABB shares are projected to appreciate by 24.8% by 2026. In one year, the growth is 76%. ABB's market capitalization is 139.45 billion Swiss francs (US$176.7 billion).