The European Investment Bank has agreed to provide a EUR 8 million loan to the Seychelles Cable Systems Company (SCS) for the installation and operation of the first submarine fiber optic cable for international connections to Seychelles. During an official visit that took place on March 4, the European Investment Bank (EIB) announced its financial support for the first submarine fiber optic project in Seychelles.
This loan, to the value of €8 million, will contribute to connecting the Isle of Mahé to the East African submarine cable system, reported the Réussir Business news site.
The fiber optic link will dramatically improve both telecommunications and internet access in Seychelles, with international transmission capacity estimated at being 7 times cheaper than current prices. Direct cable-based internet links will enable improved healthcare and education links, enhance job opportunities, and are expected to slow down the emigration of skilled islanders.
“Seychelles to East Africa Submarine Cable will bridge the digital divide and enable much cheaper communications than current satellite links. This project demonstrates the European Investment Bank’s commitment to supporting internet access essential for companies and communities in the 21st century,” said Plutarchos Sakellaris, European Investment Bank Vice-President responsible for Africa, Caribbean, and Pacific lending operations.
This support from EIB will fund a 1,930km cable from the main island of Mahé to the existing Eastern Africa Submarine Cable System in Tanzania and is expected to be operational by the second half of 2012.
The Seychelles Submarine Cable Project loan was signed in Victoria by Plutarchos Sakellaris and the Vice-Chairman, Mr. Benjamin Choppy, of the Seychelles Cable Systems Company during a high-level official visit to Seychelles by the European Investment Bank. Mr. Choppy who is also the Permanent Secretary responsible for ICT in the Government of Seychelles remarked that ‘the signature of the loan agreement for the financing of SEAS (Seychelles East Africa System) is a key milestone for the project and that the project itself will bring a quantum leap in the development of the ICT sector in Seychelles.’
The project will also benefit from a EUR 4 million grant from the EU-Africa Infrastructure Trust Fund to support shareholding in the project by the Government of Seychelles. A statutory dividend from this equity stake will be used to provide free internet access for schools, libraries, hospitals, and other social development-related services. The Vice-President of Seychelles, Mr. Danny Faure stated that “The signing of the financing agreement with EIB for the construction of SEAS will bring us closer to achieving the Government’s objective of ensuring that the Seychellois people have access to high-speed communication at affordable prices. This in turn will allow the country to reap the full benefits of broadband. The decision by EIB to co-finance this project is yet another testimony of the confidence that our international partners, in particular financial institutions, have in the economy of Seychelles.”
The EUR 27 million overall project cost will be financed through 40% equity and 60% debt. Long-term debt will be co-financed equally by the European Investment Bank and African Development Bank, and equity contributions split between three shareholders, the Government of Seychelles, Cable and Wireless Seychelles, and Airtel.
The European Investment Bank has previously supported the Eastern Africa Submarine Cable System initiative to connect twenty coastal and land-locked countries in East and Southern Africa using a high bandwidth undersea fiber optic cable and terrestrial link to the rest of the world.
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