COMMENT: The Three Seas Initiative's digital imperative

COMMENT: The Three Seas Initiative's digital imperative
The Greenergy Data Center in Tallinn is the region’s biggest and most energy-efficient data centre. / Greenergy Data Centers
By Dominykas Tuckus in Vilnius April 12, 2024

The ever-evolving digital sphere presents unique challenges for Central and Eastern Europe (CEE). In an era where technology is being increasingly weaponised and the new limits of artificial intelligence, cyber security and data privacy are yet to be tested and understood, these challenges must be addressed and confronted head-on. 

Having relatively developed digital connectivity infrastructure, the largest CEE countries still lag behind their Western counterparts in terms of internet access and e-service proliferation. Within the connectivity umbrella, e-commerce is a sector that is rapidly catching up with the West, and is now starting to find its footing in the region. However, all these factors point to the need for quality infrastructure to meet the growing demand. 

Pressingly, the region finds itself on the frontline of escalating cyber attacks, particularly in light of Russia’s aggression in Ukraine and continued threats. The significance of these threats cannot be understated; we are preparing for a proliferation of digital services and e-support across CEE, from the public sector to industrial supply chains, and this comes with added responsibility for security.

Enter the Three Seas Initiative (3SI). Since its inception in 2015, it has strategically prioritised digital connectivity across 13 CEE member states as one of its key pillars, along with sustainability and infrastructure development. Understanding the transformative potential of digitalisation in driving economic growth is just the start: the 3SI’s push for smart connectivity hopes to link the energy and transport infrastructure with digital services, to create a fully integrated, modern-day solution for the region’s citizens and companies alike.

Accelerated growth necessitates infrastructure expansion

As the region’s leaders convened for the annual Three Seas Summit this week, the location and timing of the gathering couldn’t have been more convenient. Vilnius is a city rapidly gaining a reputation for its digital advancements, and represents a cluster of countries that have been CEE’s shining beacon for digitalisation efforts.

The event has attracted key government and private sector leaders that have accelerated the Baltic’s push into the digital age, in addition to major global tech giants such as Apple, IBM and Meta, among others. Given the 3SI strongly emphasises the development of north-south connectivity, the summit serves as a catalyst to share experiences and spur collaboration with less savvy corners of the continent.

When we secured our mandate to manage the Three Seas Initiative Investment Fund (3SIIF) four years ago, we recognised that developing sustainable digital infrastructure must be front-and-centre of our mission. The growth of e-services and the rise of e-commerce are among the driving factors; while digital infrastructure in the region is growing, support infrastructure designed to handle the growth in demand is what requires investment. Higher demand for e-services and digital products naturally requires more data processing capacity, something we are looking to capitalise on.

A prime example of our work in this area is our flagship project in Estonia, to develop the next generation of sustainable data centres. Nestled on the outskirts of Tallinn, known for its vibrant tech ecosystem, the Greenergy Data Center is an architectural and technological marvel. It is the region’s biggest and most energy-efficient data centre, spanning 14,500 square metres and a capacity potential of 31.5 MW. With AI technologies, it ensures over 25% higher energy efficiency than predecessors. It is a marker for the region, and a statement of intent that capacity and security are at the heart of our investment plans, to bring connectivity safely to the people within 3SI regions and beyond.

Commercialisation of the facility is no longer limited to large multinationals with near-unlimited budgets, but also regional entrepreneurs harnessing a local network, ensuring that our path toward digitisation continues to develop within. Through these networks, we can continue to grow capacity to serve demand that is likely to increase exponentially.

Above all, it signifies optimism, and for Thursday’s summit, it is the most powerful perception to keep discussions – and investments – flowing. It is incumbent upon us to not just finish what we started, but nurture it and grow it to a position where CEE represents the gold standard of intra-regional connectivity. The Three Seas Initiative, and the fund as its key investment vehicle, are leading this charge.

Dominykas Tuckus is Senior Investment Director at Amber Infrastructure (Investment Advisor of the Three Seas Initiative Investment Fund).