Fibre optic infrastructure insured at Sh1.9b

May 29, 2008

, NAIROBI, May 29 – Credit and risk insurance firm, African Trade Insurance Agency (ATI), issued a Sh1.9 billion risk insurance cover on Thursday for the national fibre optic infrastructure project in Kenya.

ATI is a multi-lateral international financial institution, headquartered in Nairobi, and a legal entity established at the COMESA Summit of Heads of State and Government in May 2000.

The ATI Chief Executive Officer, Peter Jones, said in a statement that the insurance cover would help give impetus to the development of the fibre optic network in Kenya, which would enhance internet services, thereby reducing the communications costs.

The laying of the 5,000km National Optic Fibre Backbone Infrastructure (NOFBI) cable has been split into three sections namely Western Kenya, Coast and North Eastern region, and Central region at a cost of Sh4 billion.

He noted that his company’s support for the fibre optic project would not only be a major boost to the economy through reducing the cost of doing business in Kenya, but would make the country a competitive destination for Foreign Direct Investment (FDI).

Operators in Kenya pay Sh47, 000 for one gig bit per month compared to their Indian counterparts who pay about Sh13, 400 for the same capacity.

“The rapid development of the fibre optic network in Kenya is crucial for the country to achieve middle income status in 22 years, as envisaged in the economic blueprint, Vision 2030,” Jones noted.

The ICT sector has been identified as one of the key sectors, which is pivotal to accelerating the rate of economic growth in Kenya.

Jones added that increased internet and data connectivity would strengthen e-learning in schools, since in most of the regions covered by this project, the ratio of pupils to teachers was very high.  

French company, Sagem Communications, is one of the three companies that were awarded tenders to construct the NOFBI in the Coast and North Eastern section in September 2007.

The contract entails the provision of the delivery, local transport, installation, commissioning, testing and long term technical support of the NOFBI cable.

Sagem Communications CEO Patrick Sevian said: “The importance of the fibre optic in Kenya cannot be overemphasised. It will increase internet and data connectivity and make new business opportunities such as the BPO sector viable. Our partnership with ATI will help us deliver our business promise to the Kenyan Government and people”. 

With a paid in capital of US$79 million, ATI has nine full members, namely: Kenya, Burundi, Democratic Republic of Congo, Madagascar, Malawi, Rwanda, Tanzania, Uganda, and Zambia.

Djibouti, Eritrea and Sudan have also signed the ATI Treaty and are in the process of completing membership requirements.

Liberia is in the process of signing the ATI Treaty.

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