$215 Million Central Africa Backbone Program (CAB Program) Will Bring Low Cost, High Speed Internet to the Region. Program is expected to bring significant development impact.
Source: World Bank Press Release No:2010/094.SDN
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GENEVA, October 6, 2009 – Today the Executive Board of Directors of the World Bank Group has announced its endorsement of the $215 million, ten-year Central African Backbone Program (CAB Program). This program will support the countries of the Central African region in developing their high-speed telecommunications backbone infrastructure to increase the availability of high-speed Internet and reduce end-user prices. The CAB Program will also help countries harmonize the laws and regulations that govern the ICT sector to increase private sector investment and improve competition.
Three countries – Cameroon, Chad and Central African Republic (CAR) – are participating in the initial $26.2 million phase of the Program. A further eight countries are also eligible to participate in the Program—Republic of Congo, Equatorial Guinea, the Democratic Republic of Congo, Gabon, Niger, Nigeria, São Tomé and Principe, and Sudan.
The CAB Program is being supported through a partnership between the World Bank Group and the African Development Bank (AfDB). The program also aims to leverage an additional US$98 million from the private sector. In conjunction with the Economic and Monetary Community of Central Africa (CEMAC), the African Union Commission (AUC) will play an important role in facilitating inter-governmental cooperation and policy harmonization. The International Finance Corporation (IFC) will also assist governments in structuring Public Private Partnerships under the program.
The CAB Program brings much needed connectivity to Central Africa. Until now, people in Central Africa have the lowest quality and highest cost Internet and telephone services in Africa. The population pays up to two times more in monthly Internet rates than people living in other African countries, and up to three times more than those living in other parts of the world. “The CAB Program is very important for the countries involved and lies at the heart of their development strategies. It will assist countries to strengthen their enabling environment, create competition and, ultimately increase access and lower the costs for end users,” said Mary Barton-Dock, World Bank Country Director for Cameroon, Chad and Central African Republic.
In its recent Information and Communications for Development 2009: Extending Reach and Increasing Impact, the World Bank found that for every 10 percentage-point increase in high speed Internet connections there is an increase in economic growth of 1.3 percentage points. The report also identifies the mobile platform as the single most powerful way to reach and deliver public and private services to hundreds of millions of people in remote and rural areas across the developing world.
“Ultimately, our goal is to develop regional and national broadband backbones and significantly reduce the cost of ICT services in Central Africa. Through better and affordable connectivity, the aim is to leverage the transformational powers of ICTs to support economic growth, SME development, employment creation, productivity gains and trade integration in the region,” says Mohsen Khalil, Director of Global Information and Communications Technologies at the World Bank Group.
Modernizing the ICT Sector
In addition to infrastructure development, the CAB Program will strengthen the capacity of public institutions such as the sectoral ministries and regulatory authorities and will promote a competition-friendly environment by liberalizing the sector and restructuring telecommunications operators.
The Program is also meant to be a model of regional integration and successful public-private partnerships. Its design and implementation require the cooperation of several countries and international and regional organizations. Design goals will be to: (i) maximize the use of private financing (or minimize the use of public financing); (ii) ensure feasibility and attractiveness of the transaction; and (iii) secure open access to regional connectivity infrastructure and ensure competitive, reasonable tariff of international, regional and national capacity.
“This program is a great example of the World Bank’s increasing emphasis on regional infrastructure as part of Africa’s development,” said Rick Scobey, Acting Director for Regional Integration in Africa at the World Bank.
Part of a Broader Regional Strategy
The World Bank Group and African Development Bank (AfDB), in partnership, are committing significant resources and are making progress on the ground in helping to achieve the goals outlined at the October 2007 Connect Africa Summit. The Summit was convened by the International Telecommunications Union, the World Bank, the African Development Bank, the African Union, and the United Nations Global Alliance for ICT and Development.
This partnership has already launched three major regional connectivity programs, among a range of other ICT activities, with a fourth in the pipeline.
Regional Communications Infrastructure Program (RCIP)
The World Bank is providing US$424 million in financing for the Regional Communications Infrastructure Program (RCIP) to support regional connectivity and transparency in government through the use of ICT. The Program is available to all countries in the East and Southern Africa region and can be tailored to each country’s specific needs and priorities. The first phase of RCIP included Kenya, Madagascar and Burundi and was approved by the Board of the World Bank in 2007. The second phase was for Rwanda and was approved in 2008. The third phase includes Tanzania, Mozambique and Malawi and was approved by the Board of the World Bank in June 2009.
East African Submarine Cable System (EASSy) – World Bank Group, AfDB and other Development Finance Institutions (DFIs)
EASSy is a 10,000 km submarine fiber-optic cable running along the East Coast of Africa from Sudan to South Africa. It will directly connect eight of the countries along the route and indirectly connect all of the others in the region to the international communications infrastructure. It will provide broadband connectivity to the global fiber-optic cable networks, supplying low-cost, high bandwidth capacity to the markets in the region.
The project was developed by a consortium of 26 telecommunications operators, mostly from Eastern and Southern Africa with the support of five DFIs: International Finance Corporation (IFC), the AfDB, European Investment Bank, Agence Française de Développement (AFD) and Kreditanstalt für Wiederaufbau (KfW). The total cost of the project is $235 million with around $70 million coming as debt-financing from the DFIs. Of this, IFC contributed $32.7 million and AfDB contributed U$14.5 million.
EASSy is one of three submarine fiber-optic cables that are due to become operational in the region between 2009 and 2010. Experience shows that competition between submarine cables is the best way to achieve efficient and affordable ICT services.
West African Power Pool – Joint World Bank-AfDB
Limited inter-country connectivity in the Economic Community of West African States (ECOWAS) region results in inefficient, costly routing of calls between neighboring countries by satellite. Policy makers in the region have identified the emerging regional electricity transmission infrastructure as a way of improving high bandwidth regional communications capacity. These electricity networks have built in fiber-optic cables whose spare capacity can be utilized to provide backbone services to communications providers on a wholesale basis.
The World Bank and AfDB have been closely involved in developing the regional electricity transmission infrastructure through the West Africa Power Pool (WAPP). This transmission infrastructure will also be able to carry telecommunications traffic. In 2008, a stakeholder workshop in Benin endorsed the opportunity and committed to removing the bottlenecks associated with creating a regional backhaul network.
The World Bank and AfDB continue to provide support to the development of this network in FY09 through the preparation of the detailed technical, commercial and financial feasibility studies. Staff are also working with governments in the region to address the legal/regulatory and contractual arrangements for implementation, and continue to work with other donor agencies to ensure that efforts in this area are complementary.
“Regional communication infrastructure programs such as the CAB program illustrate what can be achieved through a strong partnership between the governments, private-sector and development partners,” said Yann Burtin, Project Manager for the CAB Program. The contributions of the AfDB and of the African Union Commission are essential to the process, added Burtin.
“The CAB program is an exciting development for Chad, Cameroon and the Central African Program. Regional connectivity projects like this one are increasingly important in the African Development Bank’s strategy for the region,” said Amadou Thierno Diallo, Manager for Energy and ICT at theAfDB.
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Labels: AfDB, AUC, Barton-Dock, Burtin, CAB program, CEMAC, Chad, Diallo, EASSy, ICT, IFC, Mohsen Khalil, Scobey, telecoms, WAPP, World Bank