Description:

The USD 600m Seacom project is the first undersea fibre optic cable project along the east coast of Africa, the only region in the world not currently served by such an infrastructure. The project closed in November 2007 and involves the construction of a 15000Km cable directly connecting Mtunzini in South Africa to Mumbai India, via Marseille in France, Egypt, Mozambique, Madagascar, Kenya and Tanzania. The project will have a capacity of 1.28TB per second providing much-needed bandwidth capacity for South Africa and a number of east coast African countries that currently rely on expensive and limited satellite bandwidth.

EAIF provided USD 35m debt financing to a special purpose vehicle controlled by Industrial Promotion Services (Kenya) Ltd, one of the sponsors and a subsidiary of the Aga Khan Fund for Economic Development with a 25% equity interest in the project.  This debt financing, allowed IPS to transfer its equity investment into the Seacom undersea fibre optic cable.

The project fits into the Emerging Africa Infrastructure Fund (EAIF) business and strategy, which has a brief to back highly developmental infrastructure projects in Africa.

Eastern and Southern Africa are significantly underserved in telecommunications bandwidth - a measure of telecommunications capacity.  Africa as a whole, already underserved in comparison to the rest of the world, has bandwidth use of 107 million Mbps.  Of this, only 35.9 million mbps is in sub-Saharan Africa.  The lowest penetration of band-with in sub-Saharan Africa is in East Africa, the only area in the world not currently served by submarine cables.  It has only 3.9 million mbps in bandwidth, less than West Africa with 10.5 million mbps; West Africa at least being served by one submarine cable.  Southern Africa with 22 mbps, mostly in the Republic of South Africa is much better served, but still significantly underserved with e.g. even Northern Africa having 72 million mbps of service.

Apart from limited capacity, sub-Saharan Africa suffers from very high prices and low connection speeds in part driven by the limited capacity installed and in part by the technological limitations of the satellite services on which it relies; satellite has limitations when compared with undersea or overland cables which provide much higher bandwidth capacity at a much lower cost.