Preparations for African countries to co-operatively build an undersea cable connecting the east side of the continent to the rest of the world are moving along.
The co-ordinators of the East African Submarine Cable System (Eassy) say they have concluded interconnection agreements with three cable systems to carry traffic between Africa, Europe and Asia.
These agreements lay the framework to enable Eassy to offer operators services from the point of origin of the call to any part of the world, says Balancing Act in this week's newsletter.
The project has also included the Comoros in its planned fibre network, to which 29 African entities are party, says Eassy co-ordinator John Sihra.
Sihra previously emphasised the cost of the Eassy project remains $235 million, not the $440 million that is periodically stated in the media.
Donald Nyakairu, chairman of the Eassy finance committee, says project funding is in place, with some operators paying directly. Other operators will contribute through the special purpose vehicle known as the Western Indian Ocean Cable Company.
"He says the maximum amount of loans Eassy could accept was $170 million but it was likely borrowed money would not exceed $110 million," the Balancing Act report says.
The Development Bank of South Africa (DBSA) previously told ITWeb it had set aside $40 million to finance Eassy. However, the final amount used would depend on demand from Eassy parties, said DBSA ICT specialist George Finger.
Project management
John Katiti, policy project manager for the New Partnership for Africa Development's e-Africa Commission, previously said construction for the cable had not yet begun. However, the cable will be ready for commercial operations in the fourth quarter of 2008.
Balancing Act says an environmental assessment found the undersea cable would not have a negative impact on the marine ecosystem.
A marine survey, to map the cable route and ascertain whether the findings of earlier studies are accurate with regards to best route and length of the fibre system, is due to start, the report says.
New landing points, at Grand Comoro and Mayotte, have also been included in the Eassy project, bringing the number of landing points to 10.
Botswana financing sorted
Cresco Project Finance says it assisted the Botswana Telecommunications Corporation (the Botswana state-owned fixed-line operator) to finalise project financing for the country's participation in the Eassy project. Cresco is a local company that assists governments and contractors to develop feasible projects to ensure funding is obtained.
"It was recommended that Botswana go directly into consortium, but also take a small stake in the special purpose vehicle," says Johan Greyling, project finance director of Cresco.
He says Botswana Telecoms is the only Botswana telecoms company taking part in the Eassy project, even though the country has three gateway licences allowing two other telecoms operators to self-provide for international access.
The challenge is that the Eassy project requires a large capital expenditure, he says. Botswana has a small population of 1.5 million people, making it difficult for operators to easily get a return on investment on capex for a project as big as Eassy, he says.
"The other two operators were unwilling to invest or co-fund the country's participation in the Eassy project," he adds.
The operators not involved with Eassy will be able to buy bandwidth from Botswana Telecoms at reasonable cost, as Eassy operates on open access principles, he adds.
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