The Ministry of Digital Development is preparing a preferential lending mechanism for data center operators

The Ministry of Digital Development is preparing measures to support the data center market. We are talking, among other things, about the mechanism of preferential lending (with rates up to 5%) for the purchase of Russian-made engineering infrastructure. Industry representatives confirm that it is now difficult for them to raise funds on market conditions, and the cost of implementing projects is only growing due to the rise in price of equipment. But before launching support measures, it is necessary to legislate the concept of “data center operator,” market participants emphasize.

According to two Kommersant sources in the IT market, on November 21, the head of the Ministry of Digital Development, Maksut Shadayev, at a strategic session in the government dedicated to the national project “Data Economy”, proposed to include in it a mechanism for preferential lending to data center operators purchasing Russian engineering equipment for the construction of data centers : fire protection systems, climate control equipment, uninterruptible power supplies (UPS), etc. The Ministry of Digital Development told Kommersant that the measure is “being studied,” clarifying that we are talking about engineering and server equipment.

Proposals regarding data center support, including through preferential lending, were sent to the Ministry of Digital Development in October by the ANO “Coordination Center for Data Centers and Cloud Technologies” (ANO KS DPC, includes Rostelecom, Sber, Oxygen, etc.), its general director Dmitry Bederdinov told Kommersant.

“Data center projects have a significant payback period, as well as a long process of preparing for implementation. Given the increased interest rates on loans and increased prices for equipment, companies are experiencing difficulties in raising funds to launch new projects,” explains Mr. Bederdinov. Therefore, he adds, the industry has proposed a mechanism for subsidizing rates to reduce payback periods, which “in today’s realities range from 15 years.” “It is assumed that data center operators will be able to receive preferential loans at no more than 5% per annum; now the rate reaches 20%,” said Mr. Bederdinov.

According to the forecast of the Iks-Consulting agency, by the end of 2023, the Russian data center market will grow by 20.9% year-on-year, reaching 71 thousand rack spaces. The three largest players include Rostelecom, Ixcellerate and DataPro. At the end of 2022, Iks-Consulting estimated the market volume at 89.1 billion rubles.

Participants in the data center market interviewed by Kommersant say that in addition to expensive loans, it faces other problems. Thus, according to Ilya Mikhailov, director of Selectel data centers, over the past year, the equipment necessary to maintain the operation and fault tolerance of data centers (diesel generator sets, UPS, cooling systems) has risen in price “on average by one and a half times.” Kommersant’s interlocutor in one of the data centers says that in 2023, prices were also increased by Russian manufacturers of engineering infrastructure. According to him, on average, domestic equipment is 30–40% more expensive than similar equipment from China.

The general director of the Refkul company (which produces climate control equipment), Alexey Morozov, explains that prices have increased “primarily due to the devaluation of the ruble,” but the company is “taking measures to possibly optimize the cost of its products.” The top manager talks about difficulties in price competition with foreign, mainly Chinese, manufacturers, since “their products are supported by the state through VAT refunds, as well as subsidizing imports.” However, Mr. Morozov claims, Chinese suppliers “often cannot quickly resolve customer issues and do not have support services in Russia.”

Preferential loans will help data center operators speed up the launch of new capacities on the market and make them more accessible to customers, believes Alexey Zabrodin, technical director of Rostelecom-DPC. The implementation of the mechanism will require serious regulatory changes, he clarifies: Russian legislation still does not have a definition of a data center operator itself, which creates confusion. “Conventional “miners” can call themselves a “data center operator” and ask for large volumes of electricity at a low price,” says the expert. At the same time, he emphasizes, “it is important when creating definitions not to create unnecessary barriers for real operators.”

Nikita Korolev