Olbiil Era Kelulau (OEK) passed House Joint Resolution authorizing the issuance of sovereign guarantee to support loan financing of Belau Submarine Cable Corporation’s (BSCC) second submarine cable to Palau just in time.
Senate President Hokkons Baules confirmed yesterday that Senate passed the resolution to support BSCC’s second submarine cable project.
Mr. Robin Russell, Chief Executive Officer, BSCC, commended the congress for such quick action despite the short time frame given to deliberate on the matter. “This has been changing and evolving in a short time. In March this year because of COVID-19, we suspended the project, going only with branching unit. In July with indication of support from the US we went back to full cable strategy.”
The passage of the resolution will “trigger flurry of activities” with financing institutions to close the financing contracts. Mr. Russell added that a lot of work has been going on behind the scenes on the “complex web of contractual financing as well as supply elements”, stated Russell.
Mr. Russell added that it is “just in time” to finalize appropriate financing elements of the project. Supply elements, the contracts are already deeply advanced with design and contracts completed.
The second submarine cable was sought to provide resiliency and redundancy in case of outage from the existing submarine cable. According to BSCC, the original plan to use satellite for redundancy was changed due to lack of “suitable satellite solution”. Cost of satellite capacity is at $2.2 million for 500Mbps.
Current submarine cable capacity is enough to meet Palau’s needs until 2036 based on projected growth but not seizing the opportunity to secure this second cable connectivity will exposed Palau to risk of exposure to cable outage, according to BSCC. There is no guarantee that opportunity of an east-west connecting cable passing Palau will happen again or the financing opportunities available at this time, will be available then.
The second submarine cable project, based on current schedule timeline, will complete construction in 2022 and will be in service in 2023.
“This is a big milestone for BSCC and all eyes will be on it,” expressed Mr. Robin Russell, CEO of BSCC.
Loan guarantee resolution passed just in time
