Institutional investors Ilmarinen and OP Financial Groups insurance and pension affiliates are matching the Finnish government entity Governias €20 million investment to inject a combined total of €40 million equity funding into the Cinia Groups new submarine infrastructure. Known as the Baltic Sea Cable, the infrastructure will be built between Finland and Germany.
Senior debt capital markets will provide the remaining funds required, enabling this investment to support the new digital hub being created in Helsinki and Finland. This will strengthen the Nordic IT platforms and highlights the potential for further investments in data centres, connectivity and industrial internet companies in the emerging cloud cluster.
Despite the current economic cycle, traffic rates continue to grow and the industry requires new infrastructure to serve as backbone for the digital economy in robusness, scalability and reliability.
Direct connectivity between Finland and Germany with robust and future-proof technology is essential. The planned submarine system will have landing points in Helsinki, Finland and in the Rostock-Ribnitz area in Germany. The key selection criteria for the landing station location included the existing infrastructure, route diversity and sustainable routing through sea areas. Surveys and preparatory works for the permitting and landing sites have begun and construction works will be conducted during 2015. The system is due to be completed in early 2016.
As a long-term investment with a reasonable cost of capital, this project is ideally suited to a committed and experienced player in the submarine infrastructure sector. We are pleased to announce that Alcatel-Lucent, a leading supplier of submarine cable systems, has been selected as the vendor for building the infrastructure.
The European Commissions notification, SA.36918 (2014/N) Finland Baltic Sea Backbone Cable, confirms that the infrastructure initiative meets the needs of the new digital EU and is promoting the emergence of future digital hubs in Europe. The vendor selection was based on criteria set out in the notification.
The fundamental pillars for the investment are
- cyber security
The Baltic Sea Cable is a key initiative for both the Finnish government and the EU. It will enable connectivity and redundancy to the Nordic region and promote growth for the regions emerging data centres. As the Boston Consulting Group have recently stated in their report, a data centre being built in Luleå, Sweden will create 4,500 full-time jobs over a ten-year period and generate an economic impact within the area of €1 billion. This investment relating to the Baltic Sea Cable will lead the way in promoting the Nordic region and Finland as an attractive location for data centres and IT-related investments.