Norway government backs ambitious datacentre investment plan

Norway, in no mood to lag behind the rapid forward leaps recorded by near neighbours Sweden and Denmark, has rolled out an ambitious new strategy to position the country as a leading location for IT-datacentre operations.

The project development strategy now being championed by prime minister Erna Solberg’s conservative-led government, under its Norway As A Data Centre Nation (NADCN) plan, represents a shot across the collective bow of Denmark and Sweden.

These near neighbours have been hugely successful in using their cold climates and easy access to renewable energy to attract significant datacentre investments. The list of high profile global industry players that have, since 2010, invested in datacentres in Sweden and Denmark include Apple, Facebook and Google.

The NADCN strategy adopts an approach that includes regulatory and tax-based support. At the front-end, the stimulus plan includes the removal of taxes on plant and machinery for datacentres and data-centric enterprises alike.

The strategy also comprises reform legislation to fast-track the construction of datacentres. It aims to clarify planning regulations relating to the building of datacentres. Moreover, a new process is being implemented, at national and local council level, to simplify procedure requirements linked to public highway excavation works.

“This is a massively important national strategy. This government will cooperate with industry to not only stimulate project development and investment, but also create a working environment where regulations are simplified and costs can be kept low,” said Ketil Solvik-Olsen, Norway’s transport and communications minister.

The NADCN incorporates a range of financial support incentives covering the building of additional overseas fibre cables. It includes a state-private partnership proposal to co-finance the construction of a standby backbone network. This co-venture is expected to initially run as a pilot-scheme with capital input from Innovation Norway, the state-run national development finance organisation.

Significantly, and particularly from the point of view of investors, the NADCN plan includes enhanced government spending on IT skills. The initiative will fund an additional 1,250 student placements at universities and technical colleges across Norway by year-end 2018 alone.  

“Norway does have the reputation for being a high-cost location. We need to play to our strengths. The growing IT segment in our third level educational system is one positive. Another, and one that will interest datacentre investors and operators, is our well-functioning power sector. We have large renewable energy resources offering competitive electricity rates,” said Torbjørn Røe Isaksen, Norway’s industry minister.

Norway’s datacentre sector is largely populated by small to medium-sized players like Basefarm, Evry and Digiplex. The Green Mountain facility at Rennesøy, constructed on the site of a former Nato munitions depot, is one of the country’s most high profile datacentre facilities. ICT-group Digiplex operates datacentres near Oslo, Fetsund and Rosenholm.

The scale and flow of new datacentre projects is showing concrete signs of rapid growth. Canada’s Hive Blockchain Technologies acquired the Norwegian-American Kolos project company in March. This project covers the building of a four story facility holding 70-MW of IT equipment in northern Norway. The facility has the potential to scale-up processing capacity to 1,000-MW. Strategically, Kolos will support HIVE’s blockchain and crypto-currency infrastructure business.

Ringeriks-Kraft is being linked to a co-venture with a Japanese investment partner to build a datacentre at a site located north west of Oslo. Additionally, the German IT manufacturing group Rittal plans to expand its newly opened datacentre in Lefdal, outside Oslo. The Lefdal Mine Datacentre, at full utilisation at around 120,000 square metres of white space, has the potential to become Europe’s biggest datacentre.

The NADCN plan has been simmering under the surface of the Norwegian government’s broader National ICT Development Strategy for several years. Norway has prioritised specific policy objectives that combine strong digital innovation and data-driven value creation. The obvious goal here is to create a sustainable and integrated approach to the development of the country’s ICT sector.

Norway, in order to achieve the specific targets set out in the NADCN, will need to scale-up investments in critical infrastructure such as new overseas dark fibre routes. The implementation of proposed tax incentives will also be important in the NADCN’s overall vision. Understanding the need to elevate Norway’s tech-image globally, the Norwegian government plans to also channel funding into marketing projects designed to bolster the country’s reputation as a cost-competitive cold-climate location for datacentre investments.