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Central Africa Backbone Progra AFRICAN DEVELOPMENT BANK NEPAD Infrastructure Project Preparation Facility (IPPF) Special Fund NEPAD-IPPF In collaboration with the Fund for African Private Sector Assistance (FAPA) Project Information Memorandum CENTRAL AFRICA BACKBONE PROGRAM JULY 2008 Table of Contents Page 1. Introduction .............................................................................................................................................................1 2. Project Description ................................................................................................................................................10 3. Cost Estimates for the Two Preparatory Activities (Legal and Financial) ...........................................................15 4. Procurement of Goods and Consultancy Services ................................................................................................16 5. Project Schedule ....................................................................................................................................................18 6. Implementation .....................................................................................................................................................18 7. Conclusions ...........................................................................................................................................................20 8. Recommendations .................................................................................................................................................21 Annex1: Draft Letter of Agreement and attachments ...................................................................................................24 Annex2: Cost Estimates ................................................................................................................................................32 Annex3: Terms of Reference (TOR).............................................................................................................................34 Annex4: Main conclusions of the initial feasibility study on the Central Africa Backbone........................................45 Annex5: Africa Backbone .............................................................................................................................................49 Annex6: Connect Africa Summit Goals .......................................................................................................................50 Annex7: Terms of Reference for the Project Coordinator ............................................................................................51 This Report was prepared by Mr Ali YAHIAOUI, Chief ICT Officer, OINF.3 (Ext.2471), following a mission to in February 2008, assisted by Mr Mike SALAWO, NEPAD-IPPF Task Manager, ONRI.1 (Ext. 3077), and Ms Randiana RAKOTOMALALA, FAPA Task Manager, OPSM.3 (2757). Any inquiries relating to this report may be referred to either the author or to Mr.A. DIALLO, Division Manager, OINF.3 (Ext. 2125). i LIST OF ABBREVIATIONS AfDB: African Development Bank CAB: Central Africa Backbone CAMTEL: Cameroon Telephone Company (national operator) CAR: Central Africa Republic CEEAC: Central Africa States Economic Community CEMAC: Central Africa Economic and Monetary Community DRC: Democratic Republic of Congo EASSy: East Africa Submarine Cable System FAPA: Fund for African Private Sector Assistance GIE: Economic Interest Group GSM: Global System for Mobile Communications ICT: Information and Communication Technologies ISP: Internet Service Provider IT: Information Technology ITU: International Telecommunication Union MOU: Memorandum of Understanding NEPAD: New Partnership for Africa’s Development NEPAD-IPPF: NEPAD Infrastructure Project Preparation Facility O&M: Operations and Maintenance PPIAF: Public-Private Infrastructure Advisory Facility PPP: Public-Private Partnership SAT-3/WASC: South Africa Transatlantic/West Africa Submarine Cable SEA-ME-WE3: South East Asia-Middle East-Western Europe 3 (Cable) SPV: Special Purpose Vehicle SUDATEL: Sudan Telephone Company (national operator) VSAT: Very Small Aperture Terminal WB: World Bank ii PROJECT MATRIX OBJECTIVES EXPECTED RESULTS OUTREACH PERFORMANCE INDICATORS TARGET/DEADLINE ASSUMPTIONS/ RISKS GLOBAL OBJECTIVE LONG TERM RESULTS Countries of the Central Africa Once the network is completed, use The studies should be completed 1. Financial closure achieved in a Region : of ICT statistics such as : by 2009 as to start implementing timely manner. Contribute to the creation of high- Once built, the CAB network will offer - decrease in costs of the backbone in 2010 2. Effective and timely speed telecommunication networks to the region a modern Cameroon, Chad, Central Africa telecommunication, implementation of the project. via the use of fibre-optic cables in telecommunication network that will Republic - increase of intra-Central African 3. Timely financing and deployment order to promote a competitive support populations and businesses to traffic and onward connectivity of backbone networks investment climate in Central have affordable and reliable telecom to global destinations, Africa Region and Internet services that will improve - Increased revenues for the competitiveness of CEMAC countries. Governments of the participating African countries as they gain due to savings from foreign exchange spent on current satellite connectivity, - Penetration of internet services and increased teledensity, - Competitiveness indicators and rankings for the Central African region) PROJECT OBJECTIVES MID TERM RESULTS 1. Government of the Central Once implemented, use of statistics 1.At start of operations in 2011, 1. Financial closure achieved in a Contribute to the harmonization of 1. Harmonized legal framework by end Africa region. such as; Capacity pricing for satellites is timely manner. the ICT legal framework in Central of 2009 2. Financial institutions, 1. Increased number of E-1s in 12,000 US $ per Mb/s per 2. Effective and timely Africa region, an d determine the 2. Different options of PPP examined 3. Telecom regulators and service. month, Regional Operator’s implementation of the project. best suited PPP structure to build, and best option selected and telecom operators in the Central 2. Cost savings for the telecom pricing will be 2,000 US $ 3. No major regulatory issues run and maintain the fiber optic implemented by end of 2009. Africa region. operators and service providers in backbone the transmission of high-capacity data. ACTIVITIES / INPUTS SHORT TERM OUTPUTS The operators in countries of the Deliverance of the following Part of private sector up to 50% 1. Delays in adoption of legislative Central Africa region. reports: of the total CAB investment texts. Several texts will be prepared 1.Review and enhance the existing 1. National and regional ICT - CAB legislative report and proposed to members States. national and regional ICT legislation harmonized CEMAC member countries - CAB legal structure report Contract signed with private 2.Issues related to Financial and legislation 2. Regional Operator established - CAB risk analysis and mitigation operator Procurement capacity 2. Propose PPP options 3. Private Investors participate in measures report 3. Available Support of traditional 3. Select and sign contract with an the financing and construction of development partners to secure the Operator the backbone. Participation of Private Operators grant 4. CEMAC commission and investors in the investment of 4. Financial closure achieved in a FINANCIAL PLAN : strengthened an enabled to cope CAB network cable. timely manner &.effective and timely with its partners on PPP projects Contract signed with a private implementation of the project. NEPAD IPPF 587,464 US$ Regional Operator 5. Efficient disbursement. FAPA 501,760 US$ CEMAC 70,000 US $ TOTAL 1,159,224US $ 1 1. Introduction 1.1 Contextual Framework 1.1.1 It has been recognised and accepted that development, deployment and utilisation of telecommunications and communications infrastructure is a necessary precondition for sustained economic growth in the continent. 1.1.2 Bridging the infrastructure gap has been identified as one of the main priorities of the New Partnership for Africa’s Development (NEPAD), whose aim is to promote, facilitate and monitor the development of regional infrastructure facilities. NEPAD recognises that the lack of regional infrastructure in the continent leads to high transaction costs and low levels of competitiveness of African countries in the local, regional and global markets and therefore seeks to promote and foster sharing and integration of key infrastructure assets to enhance the development of the continent. To achieve this, NEPAD emphasises the need for ICT Infrastructure deployment to be targeted at sub-regional connectivity and inter- connectivity projects, and initiatives directed at building and rolling-out the physical telecommunications and communication network in the continent 1.1.3 The development of regional infrastructure has become a major goal for the African continent, and has been highlighted in the priority activities of the WSIS summits in Geneva (2003) and Tunis (2005), and is in line with the recommendations of the recent summit “Connect Africa” held on 29-30 October 2007 in Kigali (see Annex6). 1.1.4 To accelerate the realisation of key regional infrastructure projects, and in recognition of the fact that most of these projects have not been adequately prepared
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