Brazil’s government is set to offer tax breaks to data center operators that build digital infrastructure in the South American nation.

Fernando Haddad, Brazil’s finance minister, is traveling to Silicon Valley next week in a bid to boost the country’s profile with the hyperscalers.

Reuters reports that Haddad’s itinerary includes a breakfast meeting with tech executives in Palo Alto, where he will pitch the new policy as well highlighting the abundant supply of clean energy available in Brazil.

Sources that spoke to Reuters said the finance ministry hopes to unlock 2 trillion reais ($352 billion) in investment with the new policy.

Under the policy, investments in IT equipment for data centers would be exempt from four key federal taxes - PIS, Cofins, IPI, and import duties - the sources said.

Building materials and other construction-related investments in data center projects will not qualify for the exemption. Operators that wish to receive the tax breaks will need to commit to using 100 percent renewable energy, and reserve a portion of data center space for domestic customers.

"We don't pick fights. We're friends with everyone. That means Brazil can serve the world without major hurdles," a source told Reuters.

Brazil’s finance ministry declined to comment when approached by the news agency.

The Brazilian power grid is largely supplied by renewable energy, with up to 80 percent of the nation’s power coming from solar, wind, and hydro sources. This makes it an attractive proposition for data center companies with soaring power requirements.

Large projects in the country include a plan by Aurea Finvest for an 800MW data center in Sumaré in the state of São Paulo.

Scala has pitched an AI city data center complex in Brazil, which could eventually offer 4.7GW of capacity, though the project is starting with a much more modest 54MW.

DCD reported this week that ByteDance, TikTok’s parent company, could open a data center in Brazil with an eventual capacity of up to 1GW.