With its banking system having collapsed under the weight of billions of dollars of debt accumulated over years of overseas expansion, an international data center in Iceland will be delayed by approximately 12 months, according to Verne Holdings, which first proposed the data center in February 2008.
The $300 million data center's launch date was pushed back the second or third quarter of 2010, according to a report from news website Iceland Review. The proposed facility was originally scheduled to open in 2009, create about 100 jobs and contribute $611 million into the economy.
"There have been delays of various kinds" chairman of the board of Verne Holdings Vilhjálmur Thorsteinsson told local newspaper Morgunbladid. "We had to obtain considerable information last summer because of the earthquake in south Iceland to convince our clients that everything was in order. That was successful."
However, the natural disaster paled in comparison to the man-made one.
"Then the banking system collapsed, currency restrictions took effect and of course the international financial crisis has influenced the foreign companies that we're negotiating with. But negotiations are still taking place and we're far ahead," Thorsteinsson said.
Thorsteinsson said his company is delaying construction until client agreements are signed.
Verne Holdings is owned by Novator, a company in the ownership of Icelandic entrepreneur Björgólfur Thor Björgólfsson, and an American investment fund, General Catalyst Partners, which lead a $55 million round of equity financing for Florida-based content distribution provider Highwinds Network Group (www.highwinds.com) in March 2008.
Verne Holdings, however, is not the only firm delaying data center projects.
Earlier in February, Terremark Worldwide (www.terremark.com) decided to delay the construction of a data center in Santa Clara, California, focusing instead on the development of its Virginia data center, the NAP of the Capital Region.
In October, real estate investment and development firm DuPont Fabros Technology (www.dft.com) announced the delay of a $270 million data center in Santa Clara after its inability to attain enough capital to finance the project.
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