Rwanda News Agency/Agence Rwandaise d'Information (Kigali)
17 March 2008
Kigali — Construction of the East Africa Submarine Cable System (EASSY) project got under way on Friday, after being delayed for almost two years by squabbling among project members and a lack of financial resources, RNA reports.
The South African government initially denied the EASSY project a landing point, claiming South African companies including Mobile Telecommunication should have additional shares in the project. The South African government has since allowed the project a landing point.
The 10,500 Km cable will run under the Indian Ocean from Durban (South Africa) to Port Sudan in Sudan and then to Europe. The cable will also provide connectivity to several African countries along the coast, where it will have landing points.
Landlocked countries waiting to tap from the cable include Zambia, Botswana, Democratic Republic of Congo (DRC), Lesotho, Malawi and Rwanda via backbone networks that will be developed by participating companies.
Project managers and a consortium of operators formed to operate the cable have also agreed that the cable will be run on an open- access basis, so that all service providers in the region would have access to the bandwidth on equal terms.
The EASSY project consortium wanted to allow only service providers with international gateway licenses to become network members. But the World Bank and other international development agencies feared that if service providers with international gateway licenses were the only ones allowed to acquire the bandwidth, they would form a cartel. This could result in high cost for users.
The construction of the cable has been made possible by the project developers, who secured all the necessary financing, officials from the EASSY Project Secretariat in Nairobi-Kenya say.
250m people
The project is supposed to be operational in the last quarter of 2009 and is expected to bring faster Internet and telecommunication services to the region.
The Eastern and Southern African regions are among the few areas of the world that still rely on satellite telecommunication. Satellite technology is blamed for the high cost of telecom and slow Internet connectivity in the region.
The goal of the cable is to support an increase in traffic and new broadband services, and connect Africa to the rest of the world - bringing cheap access to more than 250 million people.
French-American firm Alcatel-Lucent has been awarded the contract to lay the cable. Several service providers in the region are also laying national cables to be connected to the EASSY project.
MTN Rwanda, which is also part of the EASSY Consortium, is already laying a fibre optic cable that will connect up with Uganda at Gatuna border. This cable is expected to link up with another being laid by MTN Uganda.
The Ugandan portion will eventually link up with the Kenyan fibre optic cable that is slated to connect with EASSy cable in the Indian Ocean as well as the East African Backhaul Systems (EABS).
EABS is a cable that runs terrestrially from Mombasa (Kenyan coast) to Dar es Salaam (Tanzanian coast) meeting at both landing sites and allowing for connectivity of landlocked countries such as Rwanda.
"Hybrid consortium"
Over the period of February 25-29, all EASSy parties met in Dar es Salaam to conclude all outstanding issues to achieving financial closure.
This financial closure ensures that the full project funds of US$ 248 Million are in place and fully committed. This now enables EASSy to release its required down payment to the system contractor so that the construction of the cable system was to start March 14.
The ownership structure of EASSy is a "hybrid consortium" of which one of the members is the West Indian Ocean Cable Company Limited (WIOCC).
WIOCC is a specially created investment company owned by telecom companies in the participating member countries.
Along with the WIOCC parties' equity contributions of US$ 20 Million, a syndicated loan of US$70.7 Million has been secured by WIOCC from development financial institutions such as the African Development Bank (AfDB), the development bank of France (AFD), the European Investment Bank (EIB), Germany's development bank (KfW) and International Finance Corporation (IFC).
The balance of EASSy's US$248 Million project cost not covered by WIOCC's funding, is provided from direct capital investments from all its other parties.
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