THE African Development Bank Group has approved $14.5 million (Shs25.3 billion) loan under its private sector window to the East African Submarine Cable System.
The total construction cost of the Eassy cable is estimated at $235 million (Shs411 billion). Other financing will come from telecom operators and Development Finance Institutions.
A communiqué issued to Business Power from African Development Bank (AfDB) headquarters in Tunis dated September 12 said: “The AfDB financing will be channeled through the Eassy Special Purpose Vehicle (SPV) that is also known as the West Indian Ocean Cable Company”.
Eassy provides participating countries with the latest Information and Communication Technologies, driving down the cost of doing business, and further supporting the growth of private enterprise by improving productivity and attracting Foreign Direct Investment.
The AfDB funding is part funding for a project expected to cost $235 million (Shs411 billion).
Financers
Other lead financiers include the Development Bank of South Africa giving $10.5 million (Shs18.3 billion), International Financial Corporation (IFC) of the World Bank will earmark $18.2 million (Shs31.8 billion), the European Investment Bank will bring in $14.5 million (Shs25.3 billion) KfW German Bank will slot in $11.5 million (Shs20.1 billion) and the Agency for Development France is expected to cash in $9.5 million (Shs16.6 billion).
Following a meeting of experts held in Kampala last year, they did lower charges for beneficiary companies, which expressed interest to join the project.
According to the new rates companies to join the Eassy project will now have to pay a minimum investment capital worth $2.5 million each and as low as $0.55m (Shs962 million) for small firms that will have to go through the Special Purpose Vehicle (SPV).
Earlier each company was required to pay $3.8 million (Shs6.6 billion) for equal participation in the Eassy SPV-Western Indian Ocean Cable Company that will link EA coast to the rest of the world.
Work is expected to take six-seven months with the laying of cables being done by Alcatel Lucent Submarine Network and should up and running by the fourth quarter of 2008.
The expected increase in employment and income for the regions will help to reduce poverty and lead to development. Additionally, the Eassy project will help to break the barriers of social and geographical isolation and assist the population in its quest to access information and education.
The Eassy project is expected to provide the last link to completely encircle Africa with high-capacity fiber-optic telecommunications networks. Concurrently, terrestrial backhaul networks are being completed to allow the landlocked countries to link with Eassy landing stations to ensure continued cross-country and global inter-connectivity.
“The Eassy project serves to complement regional integration Information and Communication Technologies (ICT) projects and in particular the Regional African Satellite Communications Organisation (RASCOM) project approved in July 2007 by the AfDB’s Board of Directors, as it will help enhance the provision of telecom services and increase the number of urban and rural telecom users,” the communiqué said.
Cable
Eassy is an initiative sponsored by 29 telecommunications operators, the vast majority of which are African firms.
The project will construct and operate a submarine fiber-optic cable from Port Sudan, Sudan to Mtunzini, South Africa, covering approximately 9,000 km along the east coast of Africa and will connect 22 coastal and land-locked countries to each other and to the rest of the world. In Uganda, Ugand telecom and MTN are the only members of the cable consortium.
Source: The Monitor
