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AIFFP signs loan agreement for Palau undersea cable

AIFFP signs loan agreement for Palau undersea cable

Australia, through the AIFFP, signed a series of agreements with Palau and the Belau Submarine Cable Corporation (BSCC) to provide financing for the construction of an undersea fibre optic cable which will connect to a US-Singapore trunk cable. The signing ceremony was held on Wednesday, 13 January 2021 in Palau and attended by President Thomas Remengesau Jr., President Elect Surangel Whipps Jr., Australia’s Ambassador to Palau, Richelle Turner and the Chairman of BSCC,  Keobel Sakuma.  

The cable will reinforce the communications infrastructure of Palau, contributing to increasing its communication capacity and raising the stability of its international communications. With the improvement of the communications infrastructure, the investment environment of Palau will also improve, contributing to promoting investment from overseas and developing the economy of Palau. This economic boost, including local jobs in the cable’s construction, comes at a much-needed time during the COVID pandemic recovery.

The AIFFP’s support for this project builds on Australia’s support for the 4,700km of the Coral Sea Cable System cable connecting Sydney, Port Moresby and Honiara, as well as the AIFFP’s support to Timor Leste for its first undersea cable.

Foreign Ministers of Japan, the U.S., and Australia announced in Vietnam in October 2020 that this Palau cable project will be the first under the Trilateral Infrastructure Partnership  Investment in the Indo Pacific (TIP) . 

Australia opened its first diplomatic mission to Palau in 2019. This project further demonstrates our strong relationship with Palau.


COVID-19 has underscored the importance of reliable, affordable, resilient internet connectivity. We saw family and friends catching up on WhatsApp and Facetime, schools and universities delivering classes online, medical specialists meeting weekly via Zoom, international and bilateral virtual meetings via Webex and other platforms.

In addition, with the arrival of the first submarine cable in 2017 – PC1, telecommunication connectivity in Palau has experienced rapid growth in access to and use of digital infrastructure. As of January 2020, there were over 17,000 internet and social media users – or 94% of the population using the internet.

With this increase in internet traffic, the requirement for sustainable and affordable back up capacity is vital. In 2019, Palau identified the ECHO cable network as a viable trunk option to develop a second cable, with a view to creating the required resilience. At that stage, Palau approached both the Australian Infrastructure Financing Facility for the Pacific (AIFFP) and the Japan Bank for International Cooperation (JBIC) to partner in the development of a second cable for Palau.

In response to challenging economic circumstances as a result of COVID19, Palau and Australia demonstrated flexibility in maintaining momentum on the project by reserving a connection to the ECHO cable network. This was secured in early 2020 with the commitment of financing from Australia to cover the marine survey and a branching unit. This financing provided time to secure additional partners to tailor a financial package that responded to the economic challenges of COVID19 while still realising the connection to the ECHO cable.

With Palau, and under our Trilateral Infrastructure Partnership with Japan and the United States, a package of support has been secured which responds to the economic pressures of COVID19 while addressing Government of Palau’s priority for national resilience.

This partnership demonstrates our collective will and capacity to pool resources and provide high-quality, sustainable critical infrastructure that serves the genuine needs of the people of Palau. PC2, or Palau Cable 2, will ensure reliable, secure, digital connectivity that in turn will support private sector growth, government services, new investment and improve Palau’s resilience to COVID-19 impacts.

Australia will continue to work closely with Palau and the Pacific to ensure unity and identify opportunities for the long-term sustainable economic recovery from COVID-19.

Your Excellencies, partners, friends and colleagues. Today is a celebration and a demonstration of the strength of our partnership, cooperation and shared interests and values. Infrastructure projects such as this lie at the heart of our collective vision for a secure, stable, open and prosperous Indo-Pacific.

Australia is very pleased to support Palau’s vision to strengthen its connectivity to the global internet and looks forward to working with Palau, Japan and the US to ensure the expected project benefits are realised.

 Mesulang, Thank you