The money will be channeled from the International Finance Corporation (IFC) through the West Indian Ocean Cable Company as an $18.2 million senior loan and a $14.5 million standby loan. WIOCC is a Mauritius-registered special purpose vehicle (SPV) facility created to raise funding for EASSy.
The cable is a landmark fiber-optic cable project set to connect 21 African countries to each other and the rest of the world with high-quality Internet and international communications services.
The total cost of its construction is estimated at US$235 million (Sh16 billion). Other financing is expected to come from private operators and development institutions.
EASSy is a partnership of 26 telecommunications operators, the majority of which are African firms and its cable is expected to transform the telecommunications landscape in the region as it improves access for 250 million Africans and substantially reduces costs for consumers and businesses. Construction is expected to begin by the end of the year, with the cable fully operational by the beginning of 2009.
To expand the benefits of the new cable and stimulate traffic, IFC is coordinating its efforts with the World Bank, which is financing a complementary system of terrestrial backhaul and backbone networks through the Regional Communications Infrastructure Programme.
"The EASSy cable will complete Africa's integration into the global communications network, with significant development impact for the people of East Africa and the larger region," said IFC Executive Vice President and Chief Executive Officer, Lars Thunell.
The IFC's annual investments in sub-Saharan Africa have doubled this year to a record $1.4 billion from $700 million previously.
Consumers along the east coast of Africa typically pay between Sh13,400 ($200) and Sh20,100 ($300) a month for Internet access. These prices, some of the world's highest, have an adverse economic impact on the users and on the region.
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