US Company 5-P Holdings Buys 25 percent Stake in African Fiber Optic Network

U.S. Firm Scoops 25 Percent Stake On Nepad Cable

Rwanda News Agency/Agence Rwandaise d’Information (Kigali)
NEWS
2 November 2007
Posted to the web 2 November 2007
Kigali
A US firm 5-P Holdings LLC has won the bid to be part of the implementation plan of the $2 billion submarine fibre cable project that will encircle Africa – with a 25% minority controlling stake, it was announced on Friday.

With a capacity of 3.84 Terabits per second, the 50,000 km undersea and terrestrial cable is designed to provide telecommunications connectivity to Africa and connect the continent to the Americas, India and Europe.

GA_googleFillSlot(“AllAfrica_Other_Inset”);

According to a Memorandum of Understanding (MOU) signed October 24 between NEPAD and 5-P Holdings LLC, the two parties are to collaborate in ‘financing, design and speedy implementation’ of the cable that should be operational in time for the 2010 World Cup in South Africa.

The cable was endorsed by ICT Ministers from eastern and southern African countries October 15. The minister also called for ’speedy implementation’ of the project. Nepad says the cable will avail African with connections to Europe, Brazil, India and the Middle East as well.

Under the MOU, the NEPAD Special Purpose Vehicle (SPV) will own 30 percent, a 45 % stake going to African investors and ICT Companies. The 25 percent will be for the international philanthropic and other investors, including 5-P Holdings, Nepad said in a statement on Friday.

The SPV is headquartered in Rwanda and was developed by the Kigali protocol – a plan by about 20 countries to build broadband infrastructure for the region. The EASSy cable was also planned to fall under the same framework.

The deal also requires that the SPV remains the single largest investor in the cable with Nepad and 5-P Holdings LLC working together to raise investment for the network so that it will have a shareholding which is majority African owned.

5-P Holdings LLC is a Delaware – US registered company established last year.

Nepad also says the parties will cooperate in order to “contribute to the development and promotion of the economic, social, cultural development and integration of the African continent consistent with the NEPAD objectives and principles.

The plan entails that they also facilitate the provision of ICT broadband infrastructure that supports high-quality, high-speed, reliable electronic communications in Africa and with the rest of the world at competitive market-based prices for wholesale capacity.

The broadband, Nepad says will be sold on an open access, non-discriminatory basis in order to make ICT available to end users at affordable prices.

The cable is planned to provide for the immediate or eventual landing points to every coastal and Island country in Africa. It will in part contribute to linkage of Africa to the diaspora, Nepad says.

The completion of the 50,000 km cable is expected to greatly contribute to reduction of telecommunications costs that have been a hindrance to doing business in Africa.

The ICT ministers have named the submarine segment of the NEPAD network UHURUNET; its terrestrial segment, UMOJANET; and recommended the holding company of the submarine cable as BAHARICOM. All are Swahili words, an indigenous African language of the African Union.

UMOJA means unity. UMOJANET which links all the African countries with ICT broadband signifies the importance of unity of African countries. BAHARI means ocean. This indicates the location of the network. BAHARICO is the company that brings together the investment of Africans across the oceans.

Mr Mool Singhi signed the MOU on behalf of 5-P Holdings while Dr Henry Chasia, Executive Deputy Chairperson of NEPAD e-Africa Commission signed on behalf of the Commission.

5-P Holdings, LLC is a Delaware – US registered company formed in 2006 to develop, finance, construct and operate a submarine fiber optic network.

US-French firm Alcatel-Lucent last month also won the bid to construct Kenya’s TEAMS cable estimated to cost some $82million.