EASSy Easterm Africa Submarine Cable System PROJECT SUMMARY Simon Olawo EASSy PROJECT SECRETARIAT

Overview 1.Introduction 2.Background 3.Project Overview 3.1Key Technical Features 3.2Capital Requirements 3.3Project Status 3.4Key Milestones 3.5Way Forward 4.Contacts

Eastern Africa Submarine System Toliary Durban

1.Introduction The Eastern Africa Submarine System (EASSy) cable project will establish a fiber optic undersea cable system connecting the region with the rest of the world. A commercially viable, robust and reliable undersea cable will provide the owners with significant opportunity to benefit directly from international traffic. International traffic is expected to grow substantially as a higher quality, more reliable, and lower cost undersea system offsets the limitations of traditional satellite communications.

2.Background The project is driven by 15 telecommunications entities from 13 countries of Eastern Africa region. The telecommunications entities are from South Africa, Mozambique, Madagascar, Tanzania, Kenya, Uganda, Rwanda, Malawi, Botswana, Djibouti, Ethiopia and Somalia. Other countries in the region as well as key global carriers are expected to eventually participate in the project.

Background cont. EASSy will link to the global submarine cable network through other regional undersea systems including SAT3, SAFE, SEA-ME-WE 3 and SEA-ME-WE 4. EASSy will provide the last link to completely encircle Africa by high capacity optic fibre telecommunications networks. The project has broad based support from the telecommunications industry, business community, and regional governments.

Background cont. NEPAD has identified EASSy as a priority project for the enhancement of ICT infrastructure in the region. The regional governments believe that a robust and reliable international telecommunications link will have significant benefits for the citizens of the region in the following ways:- Stimulating investment and economic growth, Providing a more reliable international communications,

Background cont. Will result in competitive prices for international connectivity The above objectives support the governments ultimate goal of reducing poverty and increasing economic opportunity for its citizens and in their efforts to facilitate the attainment of the UN millennium development goals. EASSy promises a new era of better quality services at reduced operational costs and user charges.

3. Project Overview The Cable system will connect Mtunzini, located just north of Durban, in South Africa to Port Sudan, in Sudan a distance of about 9,900Km. Other eight landing stations are planned for Maputo - Mozambique, Toliary - Madagascar, Dar-Es-Salaam – Tanzania, Zanzibar – Tanzania, Mombasa – Kenya, Mogadishu – Somalia, Djibouti – Djibouti, and Massawa – Eritrea.

SAT-3/WASC SAFE SEA ME WE 3 20 Global Connectivity EASSy

Zanzibar Malaba Backhaul links to EASSy Cable

Germany PortugalBrazilSenegal South Africa EgyptMalaysiaAustraliaJapan SEA-ME-WE-4 (35Countries ) SAFE (5 Countries) ATLANTIS-2 (6 Countries) SAT-3 / WASC (11 Countries ) 56 Countries India EASSy (15 Countries) Strategic Global Coverage

3.1Key Technical Features System length about 9,900 km Based on Dense Wavelength Division Multiplexing Technology (DWDM) Direct Optical Amplification Technology Additional feeder network through repeater-less festoon systems, if required 2 fibre pair system configured as a collapsed ring Proposed ultimate capacity per fiber pair 16 or 32 wavelengths at 10 G bit/s Total capacity of 320 or 640 G bit/s Initial equipage: 1 or 2 wavelengths per fiber System design life of 25 years.

3.2Capital Requirements Preliminary Feasibility Study (PFS) and initial indications from system suppliers estimate project cost at between US$ Million Based on the PFS and the refined initial traffic study, the consortium believes the project is financially viable. MOU parties have provided an indication that an amount of about 65% of estimated project costs may be available from the parties themselves for equity investment in EASSy. Initial traffic studies indicate that the returns are sufficient to attract the interest of potential debt and equity sponsors.

Capital Requirements cont. The Consortium has engaged the services of a consultant to carry out the detailed technical, financial and commercial study to authenticate the above findings. Results of the study will be available Feb 05. The projects Financial &Commercial Working Group on the basis of the minimum investment indications from MOU Parties (and in consultation with other stakeholders) is mandated to carry out the followings tasks:- Establish the funding gap (tentative position by end of November 2004) Recommend investment incentives and capacity pricing to encourage investment by parties beyond their identified individual needs for EASSy

Capital Requirements cont. Recommend most appropriate investment and ownership structure to ensure funding of the project with due regard to the interest of key stakeholders. Carry out marketing activities to potential and eligible investors within and outside the region Retain the services of a financial consultant to advise on the availability of financing, investment structure, investment incentives, etc Seek guidance from the detailed feasibility study (DFS) results.

3.3Project Status Preliminary feasibility study completed. MOU signed by eleven (15) parties. MOU Parties have formed Project Management Committee (PMC) to manage the project. PMC has constituted two main Working Groups, Interim Procurement Group (IPG) and the Financial and Commercial Group (F & CWG) to carry out its mandate.

3.3Project Status cont. Project successfully launched at an international Sub Optic 2004 conference/exhibition in Monaco France early this year. Workshop with system suppliers successfully held in Kampala June World Bank/IFC, French Development Agency and Development Bank of South Africa extended a grant for the detailed feasibility study. PMC is in the process of appointing a financial advisor/legal counsel. PMC is also seeking for project management services to better manage the consortium.

3.4Project Milestones Sign MOUQ Agree on Configuration Q Issue Invitation to TenderQ Financial ClosingQ Sign Supply Contract & C&MA Q Cable RFCSQ2 2007

3.5Way Forward and Critical Elements to meet milestones Appointment of Financial Adviser/ legal counsel for the parties To define and implement project structure To carry out road show to financiers through Information Memorandum To provide vital link to the finance and legal community of all players To advise process for implementation on the finance and legal elements To enhance the consortiums ability to succeed

3.5 Way Forward and Critical Elements to meet milestones cont. Appointment of independent Project Management team Provide independent and dedicated support To enhance overall credibility for financing To work in tandem with all parties allowing macro management and synchronization of all activities.

4. Contacts Project Secretariat Simon A. Olawo Telkom Kenya, Telposta Towers, 24th Floor, Kenyatta Av. P.O Box 30301, GPO, Nairobi Kenya TEL: , FAX: , Project Coordinator John Sihra TEL: , FAX: Mob: : Website

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