EASSy Cable The East African Submarine Cable System (EASSy) is an initiative to construct and operate a submarine fiber optic cable along the east coast of Africa to connect eight coastal countries and island nations to each other and to the rest of the world (the Project). The cable will have an initial equipped capacity of 20Gbits/sec, and an ultimate capacity when fully upgraded of 320Gbits/sec.  The route will be from South Africa to Sudan, covering about 8,500 km, and connecting the following countries: South Africa, Mozambique, Madagascar, Tanzania, Kenya, Somalia, Djibouti and Sudan.  Twenty-eight leading telecommunications operators (the Operators) from East and Southern Africa signed a Memorandum of Understanding (MOU) in December 2003 to carry out the construction and maintenance of EASSy.  EASSy will be the first optical fiber connection for most of these countries to the global optical fiber network.  In separate projects, EASSy signatories are working on the development of terrestrial backhaul connections to link land-locked countries of the region to the cable (including Botswana, Burundi, Ethiopia, Lesotho, Malawi, Rwanda, Uganda, Zambia and Zimbabwe).  The Hybrid Model for the financing and ownership of EASSy is composed of two parts:  - a Special Purpose Vehicle (the SPV), which will receive funding from the private-sector arms of the involved DFIs, including IFC, to create a commercially viable structure which meets open access policy objectives as well as supporting some operators (the SPV Operators) to fund their investment in the Project; and  - a Consortium, which will be composed of those operators (the Consortium Operators) that elect not to join the SPV and, instead, make direct  investments in the EASSy cable.   The SPV has recently been incorporated in Mauritius with the name of West Indian Ocean Cable Company Ltd. It will be majority owned by the SPV Operators.  The SPV will have its own by-laws, Board of Directors and professional management team.  It will function as a commercial entity which will manage, market and sell or lease its capacity to SPV Operators and any other authorized third parties.    IFC has been asked to provide financing to the SPV, along with five other DFIs including EIB, AfDB, DBSA, AFD/Proparco, and KfW. The funds will be used to finance that share of the Project cost resulting from the projected capacity requirements of the SPV Operators (the SPV Project Cost), as well as certain preparation and start-up expenses. The SPV Project Cost will ultimately depend on the composition of the SPV, which has yet to be finalized; however, in the current scenario which assumes 14 SPV Operators, the SPV project cost is approximately $120 million. The objective of this Project is to increase accessibility of countries in the region to the worlds global backbone communications network by providing high speed broadband connectivity, significantly reducing the current prohibitive cost of telephony and internet services in Eastern and Southern Africa.  Currently most of the region is served by restricted and expensive satellite requiring transit through third countries outside the region for country to country communication and information exchange.  As mentioned earlier, terrestrial backbone networks are also being built in separate developments to link all capitals and major cities in Eastern and Southern Africa to the EASSy cable and the international backbone system.  The Project is expected to have the following development outcomes:  - Significantly increasing the supply of high quality reliable broadband capacity and simultaneously reducing wholesale bandwidth costs, supporting a parallel reduction in end-user prices for telecommunications service, thereby boosting regional competitiveness and enabling Africa to participate more fully in the global information economy. This is expected to help provide the conditions for growth of existing businesses and to attract new enterprises which need modern low cost connectivity.  The improved access to the internet resulting from the project would also benefit educational and medical institutions and will help boost general computer usage and literacy.  - Fostering an open, non-discriminatory communications regime that ensures that capacity is available to all at a fair price: the EASSy SPV will sell capacity to all authorized purchasers thereby ensuring competition. This mechanism is designed to encourage open access and the charging of fair prices.    - Promoting private-sector led models for ICT infrastructure development in the region:  The EASSy Cable will be financed on a commercial basis, using a combination of operator equity and debt from private sector DFIs (via the EASSy SPV). This financing and ownership structure is in line with the World Banks strategy of maximizing private sector participation in the ICT sector.  - Promoting regional integration through the sharing of infrastructure facilities.