World Bank grants over US$70 million for infrastructure development in Liberia, Sierra Leone and Sao Tome and Principe

Mergers, Acquisitions and Financial Results

The World Bank board of directors has approved three major projects for three West African countries, totaling US$71.5 million dollars. The projects are aimed at boosting Information Communications Technology (ICT) infrastructure and access to services in Liberia, Sierra Leone, and the Democratic Republic of São Tomé and Príncipe.

The Republic of Liberia and Sierra Leone will receive line of credits from the World Bank to the tune of US$25.6 million and US$31.0 million, respectively, to boost their ICT communications sectors. The Democratic Republic of Sao Tome will receive a grant of US$ 14.9 million from the Bank for its component of the Central African Backbone Program.

The money, according to the World Bank, is part of a US$300 million West Africa Regional Communications Infrastructure Program (WARCIP).

“The projects have two main components. The first component will seek to create an enabling environment through provision of technical assistance and capacity building for legal and regulatory reform; and will develop public private partnership arrangements for the infrastructure to be developed,” noted a World Bank statement issued over the weekend.

The Bank pointed out that the second component, which focuses on connectivity, will provide financing for the countries' contribution (consortium fee) for participating in the Africa Coast to Europe (ACE) submarine cable on an open access basis, using public private partnerships, leveraging private sector investment, and associated investments.

The Projects will provide support to modernize legal, regulatory and institutional framework and improve overall competitive environment in the telecommunications sector and improve the viability of public incumbent operators where necessary, to make them more competitive.

In Sierra Leone, for example, the commercialization of SierraTel, the state-owned telecom operator, and the liberalization of access to the country's international gateway will be supported, while in São Tomé and Príncipe the project will help to introduce competition through the launch of a second global telecommunications operator license to provide fixed and mobile services.

World Bank Africa Region director for regional integration, Yusupha B. Crookes, added: "the growth of ICTs in Africa has been phenomenal over the past decade. Mobile penetration in particular is astronomical now, with many countries recording as high as 80%. The mobile network now constitutes the largest ever service delivery platform available to reach citizens, and is boosting Africans' ability to connect to the information super highway, thereby, creating opportunities for ordinary people to connect for social, economic and political reasons.”

Crookes noted: “better days are ahead, as prices drop, broadband improves, internet access scales up, overall quality of communication is enhanced and broader and more innovative applications become available to solve problems facing ordinary people and governments in Africa."

Last year, the Liberian government through the Ministries of Planning and Economic Affairs, Postal Affairs and the LIBTELCO as well as the Liberia Telecommunications Authority (LTA) signed the country onto the broadband connectivity which is expected to be provided by the France Telecom’s ACE cable.

Liberia needs about US$26 million dollars in order to join this connectivity. It was in this regard that the World Bank and other stakeholders promised to pay the US$26 million.

The total cost of the project for several countries in Sub-Saharan Africa is estimated at US$700 million dollars. Construction of infrastructure for this project is expected to be completed in Liberia in 2012, the government said.

Meanwhile the World Bank says it will provide support to 15 additional countries within Economic Community of West African States (ECOWAS) region to increase the geographical reach of broadband networks and reduce costs of communications services.

This new Program complements, the Regional Infrastructure Connectivity Program and the Central African Backbone, targets respectively Eastern & Southern African countries (25 eligible countries for a total amount of US$424 million) and Central African Countries (11 eligible countries for a total amount of $215 million).

The World Bank observed that Liberia, Sierra Leone and Sao Tome and Principe, are countries that currently have some of the highest connectivity costs in the world and are among a handful of countries in West and Central Africa which are not connected to the global network of broadband optical fiber infrastructure.

The projects will help to bring a major infrastructural revolution as the countries will for the first time be connected to the best of global internet broadband services network as well as develop their national backbone infrastructure for distributing broadband internet to their urban and rural masses.

Small countries like Sierra Leone, Liberia, São Tomé and Príncipe are typically ignored by private submarine cable consortia who consider their markets as too small and not attractive enough.

Currently the three countries depend on costly satellite connectivity to the tune of US$4,000-5,000/Mbps per month while those connected to submarine cables can access international capacity at much lower prices as low as US$ 600 in East Africa and US$100 in Morocco. This, coupled with a lack of national backbone infrastructure, has created a difficult environment for expanding availability of Internet services and advanced applications.