Undersea-Cable Funding Ready By Year

Pretoria,   South Africa, August 31, 2006 –The latest progress in the development of the Eastern Africa Submarine Cable System (EASSy) suggests that funding for the project will be available by December 2006 and tangible execution of the project is expected to begin early 2007.

In the region of $220-million to $240-million is needed for the complete funding of the project, according to the head of international finance at the Development Bank of Southern Africa (DBSA), Solomon Asamoah. EASSy is a monumental project that will connect some 22 countries, ranging from Mtunzini, South Africa to Port Sudan, Sudan. EASSy involves the development of 9 900 km of cables that will technologically bring Africa closer together through a high bandwidth, undersea fibre-optic cable system and terrestrial back-haul links with a global reach.

The prospect of this huge under-taking was first introduced in November 2002 at the East African Business Summit, in Nairobi. The outcome of this initial summit was to assign certain roles to the regional, licensed operators.

The aim was for these operators to prepare the project and establish a lead consortium. The following year, a memorandum of understanding was signed by the parties and they began investigating the elements necessary to execute the project. On November 23, 2004, at the summit of the Heads of State and Government Implementation Committee of Nepad in Algiers, Algeria, the network was adopted as a Nepad flagship project, says Asamoah.

He adds that the primary goal of the EASSy is “to reduce the cost of transporting voice and data inside and outside the continent as terrestrial networks are significantly cheaper than satellite”.

This will ultimately benefit the end-users and ordinary citizens, and businesses of the region will ideally enjoy savings on the price of telephone calls and Internet access.

Information communication technology is the foundation of the modern global economy and EASSy is expected to fulfill Africa’s need to be connected to the global networks. Extensive dialogue and project negotiations have continued over the past four years and agreement on the project structure and the roles of the stakeholders was reached during an all-stakeholders meeting in Nairobi, Kenya, in July this year.

The meeting between governments, the Nepad e-Africa Com-mission, telecommunications operators and the development financial institutions also resulted in the formation of a combined task force that serves to “maintain continuous dialogue and channel government’s policy objectives into the Construction and Maintenance Agreement and the Shareholder’s Agreement”, says Asamoah. The landing points of the 9 900-km cable system will include Mtunzini (South Africa), Maputo (Mozambique), Toliary (Madagascar), Dar es Salaam (Tanzania), Mombassa (Kenya), Mogadishu (Somalia), Djibouti (Republic of Djibouti) and Port Sudan (Sudan). There is also a possibility that Mauritius may be included in the project, however, this is still being investigated.

The DBSA, in collaboration with the International Finance Corporation and the Agence Française de Développement, was instrumental in financing the detailed feasibility study of the project at a total cost of $373 300.

A further addendum to the study regarding funding structures was provided for another € 45 000.

The funding structure was not concluded without debate, as there was discord over the implementation of a ‘hybrid’ model of a special-purpose vehicle.

Asamoah explains that “the hybrid model allows members of the consortium to fund their participation directly and purchase capacity in the cable, whilst others can club together and collectively acquire a stake in the project”.

This allows each participating country the autonomy to have owner- ship of part of the project at an affordable price. Asamoah comments that the South African government has been successful in the promotion of this significant private–public partnership, committed to the Nepad principles of creating a more efficient communication system in which end-users will gain from less expensive prices.

The essential objective is to establish an effective connection between all African countries and, on a larger scale, to connect Africa to the global telecommunications networks. Eastern and Southern African communications ministers were to sign the official protocol for the region’s ICT broadband infrastructure network, EASSy, by the end of last month.

Source: The Mining Weekly

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