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An AIFFP loan and grant package is enabling increased internet connectivity in Palau, with Australia, Japan and the United States supporting construction of a fibre optic submarine cable system.

Expanding digital connectivity in Palau via a submarine cable system‎ The project cable laying in Palau, June 2022.

Expanding digital connectivity in Palau via a submarine cable system‎

Palau

Approved

Type:
Telecommunications
Investment:
AUD14.7 million

Delivery partners

Belau Submarine Cable Corporation
Palau National Government
Japan Government
United States Government

We’re proud to support the construction of Palau’s second submarine cable in partnership with the Governments of Palau, the United States and Japan.

The project will provide increased reliable, secure digital connectivity in Palau and improved access to government services, including health and education.

The submarine cable branch system will be a dedicated branch off the proposed ECHO cable network, building on the bandwidth capacity afforded by Palau’s first submarine cable constructed in 2017.

500 jobs created

by project completion

Palau’s second submarine cable

We’re also providing support to strengthen Palau’s digital infrastructure regulatory environment and increase awareness of cyber safety, in partnership with the Palau Bureau of Communication.

The project marks the first to be delivered under the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific between the United States, Australia and Japan.

Our financing package includes a loan of AUD12.6 million and a grant of AUD2.1 million, with a further AUD0.8 million contributed by the Australian Government via a bilateral grant.

Works from Belau Submarine Cable Company at the project’s cable laying in Palau, June 2022.

Works from Belau Submarine Cable Company at the project’s cable laying in Palau, June 2022.

Trilateral investment partnership

between Australia, Japan and the United States

The project cable laying in Palau, June 2022.

The project cable laying in Palau, June 2022.

The project cable laying in Palau, June 2022.

The project cable laying in Palau, June 2022.

The project cable laying in Palau, June 2022.

The project cable laying in Palau, June 2022.

Project stakeholders including Australia’s Ambassador to Palau Richelle Turner (fourth from left) at the project’s cable laying in Palau, June 2022.

Project stakeholders including Australia’s Ambassador to Palau Richelle Turner (fourth from left) at the project’s cable laying in Palau, June 2022.

AIFFP contribution

AUD14.7 million

 Amount (AUD million)Amount (USD million)Fixed interest rateTenor
Loan Tranche 1$2.5$1.751.836%10 years
Loan Tranche 2$10.1$7.12.55%19 years
AIFFP grant$2.1$1.5n/an/a
Bilateral grant$0.8$0.6n/an/a

*Exchange rate: AUD/0.70USD, exact AUD amount depends on exchange rate at disbursement.

Impact

The cable will ensure reliable, secure digital connectivity in Palau. Given the geographic remoteness of Palau, improving connectivity and internet access will open up opportunities to boost tourism, business and investment, and to provide better government services, including health and education.

The project will assist Palau in its post-COVID recovery by creating local jobs and supporting the recovery of Palau’s tourism sector. Opportunities for the private sector include construction of local land-based infrastructure.

Latest updates:

  • All project civil works and cable laying have been completed on time and within budget.
  • Construction of branch cable to Palau has been completed.