AGM Index

Arusha Node Marie
Annual General Meeting 2005
15 April 2005

East African Submarine Cable System (EASSy)
by E. Yonazi -- East African Community Secretariat

Presentation Outline:

• Project Background
• Project Phases
• Project Scope
• Project Participation Status
• Future Activities: Key Milestones
• Capital Requirements
• Financing Indications and Ownership Structure
• Key Project Risks and Responses
• Conclusion

1. Project Background    

• Objectives of the EASSy MoU Parties:
  • Meet Growing Demand for Broadband Connectivity in the region
  • Seeking quality and cost advantages of optic fibre connectivity
  • Interconnect with other similar cables will supplement existing, planned terrestrial, satellite facilities
  • Joint Study and investment by the Parties for the Implementation of such a system
• Social-Economic Benefits:
  • EASSy will contribute towards the socio-economic development of the region
  • Improved high capacity connectivity within Africa and with the rest of the world.
  • Improved global connectivity to benefit all stakeholders
  • Spur terrestrial backbone links – improve cross-border connectivity
• EASSy Impact:
  

• At least 8 other Countries Targeted
  • Burundi
  • Democratic Republic of Congo
  • Eritrea
  • Ethiopia
  • Lesotho
  • Swaziland
  • Zambia;
  • Zimbabwe.
• Mechanisms in place to enable qualifying entities to join the project at current and future stages (Accession Agreement)
• Global Carriers.: e.g. BT;France Telecom; Teleglobe; MCI
• Development Partners:
  • Development Finance Institutions (DFIs)- WB/DBSA
  • Nepad- strong advocacy and system development support
  • EAC/ EARPTO

5. Future Activities: Milestones    

6. Capital Requirements    

Project cost is estimated to be US$ 200 million :

• Supply Contract Costs
• Non-Contract Costs
• Customs Duties & Taxes
• Provision for contingencies & other procurement

• About US$ 100m (50%) of required could be available from the MOU Parties
• Hence the need for other investors
• Other Possible sources of funding:
  • Operators in the region that are not yet EASSy MoU parties
  • Global carriers that may participate as equity partners
  • Debt- development loans targeted
• Ownership structure to depend on the level of equity contribution from potential users of the system (regional operators and global carriers)
  Options:
  • Club Structure- closed to only users of the system- preferred if operators can raise all required investment
  • Private company owning the system
  • Hybrid (with elements of two above)- likely in form of a Special Purpose Vehicle (SPV)
• System suppliers could be approached for possible project funding

• Inability to raise required financing in time
• Lack of support of the project by key stakeholders
• Lack of access to the cable by hinterland countries
• Rapid change in ICT and hence delays could lead to obsoleteness of assumptions & Costs
• Slow communications policy harmonization across the countries

• MOU Parties are collaborating in the planning and implementation of backhaul links (Task Force established)
• Planning for alternatives routes for landlocked countries is a priority to assure resilience
• East African Carrier Project & Others (eg.Comtel)

• EASSy Project will, as in the case with SAT-3/WASC/SAFE, serve as a shining example in demonstrating the ability of African and Global telecommunications companies to work together in harmony towards realizing an important step and building block in pursuit of the development and improvement of African infrastructure
• The model of the implementation of the Project will likely be replicated in other multi-national infrastructure projects.

• Project Secretariat
  
  Simon A. Olawo
  Telkom Kenya, Telposta Towers, 24th Floor, Kenyatta Av.
  P.O Box 30301, GPO, Nairobi Kenya
  TEL: +254 20 316167,
  FAX: +254 20 310104,
  E-mail: solawo@telkom.co.ke

• Project Coordinator:
  
  John Sihra
  TEL: +353 1 668 5205,
  FAX: +353 1 660 4840
  Mobile: : +353 87 259 3966
  E-mail: jsihra@hentelint.com

• Website: http://www.eassy.org