SANTIAGO (Reuters) -Amazon's ( AMZN ) cloud computing division will invest $4 billion to build its first data centers and other cloud infrastructure in Chile, the company's head of South Latin America told Reuters.

Amazon Web Services (AWS) expects the cloud region, its third in Latin America after Brazil and Mexico, to be operational by the second half of 2026.

In an interview in Santiago on Tuesday, local head of AWS Juan Pablo Estevez said all the necessary permits had been given for the project, which would deliver "substantial" computing power for services like generative AI.

The surge of data centers globally has caused concerns over energy and water use, which have been amplified in Chile as the country has suffered a drought for more than 15 years.

Environmental concerns forced Google to rework plans for a $200 million data center in Chile after a local environmental court partially reversed its permit last September.

Microsoft ( MSFT ) expects its cloud-computing Azure center in Chile to come online this year, according to its website.

Estevez said Amazon's ( AMZN ) cloud region would use water to cool its servers just 4% of the year, the equivalent of about eight homes over a 15-year period, with air and evaporation technology used the rest of the time.

He added that Amazon ( AMZN ) has been matching 100% of its energy consumption with renewable power since 2023.

The company already has 36 regions and 114 availability zones worldwide used by companies such as Netflix ( NFLX ), General Electric ( GE ) and Sony ( SONY ) for storage, networking and remote security.

Chilean retailer Cencosud, online retail giant MercadoLibre ( MELI ), and mining companies already use the company's other regional services, it said.

Amazon's ( AMZN ) first-quarter cloud revenue and income forecast came in below estimates last Thursday, but Estevez said he's expecting strong growth in Chile and across the region.

"The forecast is that the (Chile's) market will grow 20.3% year over year from now until 2028," he said, adding that the market was $1.5 billion last year and estimated to be $1.9 billion in 2025.

(Report by Fabián Andrés Cambero; Editing by Alexander Villegas and Philippa Fletcher)