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Belau Submarine Cable Corporation (BSCC) announced today their ongoing work to obtain a new second submarine cable to provide resiliency, security and greater capacity for Palau internet needs and sought support of the Olbiil Era Kelulau in a form of a sovereign guarantee for the project.

Currently, Palau is depending on 500 Mbps capacity from legacy satellites to serve as back up in case of outages on the submarine cable.  The existing satellite capacity is less than 10% of the current capacity Palau is using on the submarine cable.  According to BSCC, if Palau’s cable goes out, 90% of current internet use will not be possible.

George Rechucher, Chairman of the BSCC, in a presentation to the national leadership yesterday,  said BSCC is looking to bring another submarine cable to Palau in order to address the issue of security and resiliency in case the only cable connecting Palau to the world is cut or disrupted in someway.

“We have seen what happened to other countries such as Saipan and the Marshalls when their cable were cut and it took them months to restore the services,” expressed Chairman Rechucher.  BSCC report cites SEA-US cable spur to Davao’s outage that took 55 days to restore and Tonga’s outage early this year that took two weeks to restore.

According to Chairman Rechucher, it is clear that Palau needs a second cable for backup in place of the current satellite which provides only 10% of Palau’s current demand.

BSCC is looking to connect to Project Echo, a submarine cable linking Jakarta, Indonesia to Eureka, California.  The Echo Project has three equal partners, Google, Facebook and TransPacific Network(TPN) and TPN has offered to connect a spur to Palau.  The cable will pass Palau at about 200 km range.

The current estimated cost of the project is $25.4 million dollars.  Source of funding targeted by BSCC is the current rental of 500 mbps satellite capacity of nearly $2.3 million dollars by existing telecom providers in Palau for their own backup.

According to BSCC Chairman, this project is not eligible for grants and/or loans from ADB and therefore, they had to seek funding from other commercial sources.  To date, they found 3 sources, 2 from Japan, 1 from Australia and they continue to seek options.  Japan banks offered $4.7 m each with one at 4.74% interest and one at 5.59%.  Australia offered $12m at 2.8%.  BSCC will put up its own equity of $4 million toward the project.  The loan payment term is 13 years for the Japan banks and 20 years for the Australian finance.

BSCC Chairman Rechucher said that the $2.3 million currently spent to pay for satellite capacity of 500 mbps is more than enough to pay back the loans in 20 years but in order to secure the loans, BSCC will need Palau’s sovereign guarantee of the loan.

Members of the Senate and House of Delegates requested for more detail information on the project, including costs and market studies to support the request for sovereign guarantee.

President Tommy E. Remengesau tasked the BSCC and the Ministry of Finance to provide all the supporting documents as well as draft language needed for a resolution on sovereign guarantee to the Olbiil Era Kelulau.

The second cable, according to Chairman George Rechucher will provide resiliency and backup for the current cable as well as bring new ICT opportunities such as data storage, registries and trading among others to Palau. (L.N. Reklai)