The project involves one or more guarantees to Linx Telecommunications B.V. (Linx) of the Netherlands covering its parent loan guarantee(s) of up to €7.3 million in total in support of its subsidiary, Linx LLC Svyaz VSD. The proposed coverage is for up to six years against the risks of transfer restriction, expropriation, and war and civil disturbance. MIGA’s gross exposure under this project will be up to €7 million. 

This project consists of construction and operation of a Tier 3 data center in St. Petersburg and operation of Module 5 of a data center in Moscow that will provide state-of-the art data center and connectivity services to primarily international customers.

Environmental Categorization

The project is a Category B under MIGA’s environmental review procedures.  The establishment of the data center consists of the refurbishment of existing buildings, data storage areas, offices, and parking spaces.  Physical works-related impacts will be addressed within contractor management agreements.  Occupational, health and safety procedures are being developed for data center operations.  Local building and environmental permits will be obtained. 

Development Impact

The project hopes to leverage shared infrastructure and data management in order to reach economies of scale—thereby stimulating growth of technology-intensive and knowledge-based industries in Russia. Specifically, the project expects the following development results: improvement of information and communication technology (ICT) infrastructure and access to information; a lower cost of entry into the ICT market; increased competition in ICT market; rapidly expanding data/telecom networks; and local employment opportunities.

The World Bank Group’s current Country Partnership Strategy for Russia notes a need for increased private sector development and diversification of the economy—to which this project will contribute.

The proposed project would be underwritten through MIGA’s Small Investment Program.