Estonia wants to build Europe’s biggest data warehouse

Dmitri Kostenko from Web Solutions Hosting Ltd says that he is sceptical about the feasibility and cost estimations of the project.

“One question mark is the cost of the project at about 3,000 euros per square metre. For a turnkey project, it is not enough,” Kostenko told DV.

“They have also said it would be built either in Muuga or in Paldski which means that it will have water and air cooling which will add notably to the total cost,” he added.

Kostenko adds that such data warehouses are considered low-profit investments which may make it difficult to attract enough investors for the project.

“Estonia’s own data needs are too small for the capacity of its server stations which means that it would not be feasible without international business,” he added.

Also, according to the project manager Jussi Vartiainen, the decision whether to build the data warehouse in Paldiski or Muuga will be made in October after the European Commission decides on the funding of Balticconnector gas pipeline and LNG terminal because the facility will require significant gas supply.

Election promise?

Kross introduced the grand project in October 2013, shortly before local elections. At that time, Kross was running for the Mayor of Tallinn.

Commenting on the project’s current progress, Kross said that investors are yet to be found.

The project is being developed by Data Valley Enterprises whose representative Jussi Vartiainen did not wish to talk about possible investors.

The project is being managed by Data Valley Enterprises that was founded in November 2013 in Estonia.

Its shareholders include Biznia OÜ that belongs to Marko Wass, executive of TDC Finland Oy, Speed Channel OÜ that belongs to Jukka Jääskeläinen, Cerestonia OÜ that belongs to Paavo Huhtanen, Divestorum Consulting OÜ that belongs to Jussi Vartiainen and Viljakainen Holding & Investment OÜ that belongs to Teppo Viljakainen.

It has share capital of EUR 2,500 and its management board members are Paavo Huhtanen, Jukka Jääskeläinen, Jussi Vartiainen, Marco Wass and Teppo Viljakainen.

In the first phase, EUR 170m will be invested in setting up a 30,000 sq. metre server centre.

„The objective of the investment is to create in Estonia Europe’s largest data centre with 200,000 sq. metres of floor space that would provide services to global enterprises,” said Vartiainen, adding that the project would create at least 200 highly-paid jobs.

According to Vartiainen, Estonia has several advantages as a location for a data centre. „Estonia has ideal climate for servers, innovative business environment and a favourable tax system. Also, Estonia has lower labour costs and land price than in Western and Northern Europe,” he added.