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IFC-financed East African EASSy Cable Project Begins Construction, Helping Provide Broadband Access for Millions of Africans


In Johannesburg
Houtan Bassiri
Phone: +27 11 731 3179
E-mail:
hbassiri@ifc.org

In Washington, D.C.

Hannfried von Hindenburg
Phone: +1 (202) 458-5613
E-mail:
hvonhindenburg@ifc.org


Johannesburg, March 27, 2008 — IFC, a member of the World Bank Group, announced today that construction has started on the East African Submarine Cable System, a landmark fiber-optic cable project that will connect 21 African countries to each other and the rest of the world with high-quality Internet and international communications services.

The supply contract for installation of the cable, known as EASSy, is now in force. The necessary funds have been provided by the consortium of 25 telecommunications operators, which includes 19 African companies. The cable will be installed by Alcatel-Lucent along the sea bed off Africa’s east coast. It is expected to be operational by the first half of 2010.


“We are pleased to work with the EASSy Consortium in laying this new cable that will expand communications capabilities and help reduce the digital divide in the region,“ said Etienne Lafougère, President of Alcatel-Lucent’s submarine network activity.


Five major development finance institutions are partnering to provide the project’s long-term loan financing of $70.7 million, with $18.2 million coming from IFC. The balance of the project cost, $247.1 million, will be provided by the EASSy consortium members.


"We are very pleased that this long awaited submarine cable has formally been sponsored by the majority of the regional operators and by some of the leading international industry players,” said Mohsen Khalil, IFC Director for Global Information and Communication Technologies. “This is a very important milestone toward implementation of the EASSy cable, which will transform the telecommunications landscape in the region. It will provide Internet and other communications access for 250 million Africans and substantially reduce costs for consumers and businesses.”


Consumers along Africa’s east coast typically pay between $200 and $300 a month for Internet access via satellite. These prices, some of the world’s highest, create a barrier to usage and restrict economic activity and growth. Once the EASSy cable is in place, prices for international connectivity are expected to drop by two-thirds at the outset, and the number of subscribers will increase rapidly. Because the project gives open access to service providers, prices will fall further as volume and competition increase. This is expected to stimulate the development of new knowledge-based industries, call-centers, and similar ventures. Educational and health activities in the region will also benefit from access to low-cost Internet.


In a separate initiative, the World Bank Group is assisting with the implementation of regional distribution networks to connect landlocked countries in East Africa to each other and the EASSy cable, helping maximize access.


The cable will run 10,000 kilometers from the continent’s southern tip, around the African horn, and into the Red Sea, connecting South Africa, Mozambique, Madagascar, Tanzania, Kenya, Somalia, Djibouti, and Sudan. Another 13 adjoining countries will also be linked to the system as terrestrial backbone networks are completed through the broader World Bank Group initiative; these include Botswana, Burundi, the Central African Republic, the Democratic Republic of Congo, Chad, Ethiopia, Lesotho, Malawi, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe.  


Video

A short video (available in both English and French) on IFC and the World Bank’s efforts to connect East Africa can be found at
www.worldbank.org/rcip/video.

Map

A map showing the gap that the East African Submarine Cable System is filling can be downloaded at
http://go.worldbank.org/GKHOFFDJB0.  Use of the map is free of charge.
 
About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org.

To learn more about the IFC–World Bank Global ICT department, visit
www.ifc.org/ict.

Operators

1.        Bharti Airtel Limited, India

2.        Botswana Telecommunications Corporation (BTC)

3.        British Telecommunications
4.        Dalkom Somalia
5.        Djibouti Telecom S.A.

6.        Etisalat, United Arab Emirates
7.        France Telecom
8.        Mauritius Telecom

9.        MTN, South Africa
10.        Neotel Proprietary Limited, South Africa

11.        Saudi Telecom Company (STC)

12.        Comores Telecom

13.        Sudan Telecom Company Limited (Sudatel)

14.        Tanzania Telecommunications Company Limited

15.        Telecom Malagasy

16.        Telecommunicacões de Mocambique, (TDM)

17.        Telkom Kenya Limited
18.        Telkom SA Vodacom, South Africa
19.        Zambia Telecommunications Company Limited

20.        Zanzibar Telecom Limited (Zantel)

21.        Uganda Telecom Limited

22.        U-Com Burundi SA

23.        Office National Des Telecommunications, Lesotho

24.        Lesotho Telecommunications Authority

25.        Gilat Satcom Nigeria Limited


Banks

1.        International Finance Corporation (IFC), World Bank Group

2.        African Development Bank (AfDB)

3.        Agence Française de Développement (AFD)

4.        KfW, Germany

5.        European Investment Bank (EIB)