South Africa’s Techteledata (TTD) is looking for up to US$100m in project financing for a cable that would loop around the southern cape of the country, linking its east and west coasts.
The cable will cost between US$90m and US$100m, with financing…
South Africa’s Techteledata (TTD) is looking for up to US$100m in project financing for a cable that would loop around the southern cape of the country, linking its east and west coasts.
The cable will cost between US$90m and US$100m, with financing arrangements expected to be completed by the end of Q2, according to the head of the venture Musa Phungula.
Speaking to TelecomFinance, he said the project financing would be comprised of 5% mezzanine finance (junior debt) and venture capital, and 25% in the form of a loan from local development bank Industrial Development Corporation (IDC), which has submitted an expression of interest. A further 25% equity will be contributed by an as yet unnamed technical operating partner, with the final 45% coming from commercial banks on the back of IRUs, or presales, from clients buying capacity on the 100GBps cable.
Phungula aims to arrange all the financing by June, when he expects to have signed equity and debt contracts with banks.
Later in the summer a turn-key contract will be signed with an equipment maker to supply the 2,500km cable, with a tentative data of September 2015 set to launch commercial services.
The route starts at Yzerfontain on the west coast of the country and runs to Mtunzini on the east, linking two significant landing points for major international cables. Data centres will be built at the two sites. The TTD cable will also stop off in Port Elizabeth and East London.
The project faces competition from the ambitious South Atlantic Express cable proposed by eFive telecoms, which follows a similar route around the cape, but then across to Brazil.
The giant Brics cable, which runs from the east of Russia via China and India to Brazil, also follows a similar route, under South Africa, to the TTD cable but only has one landing point in the country.
Phungula argues that his project has the advantage of being smaller and therefore financing will be simpler. He also notes that the TTD cable requires approval from one government only, so his cable could be up and running sooner.
A technical feasibility study for the TTD cable is set to begin next month and will last until June at a cost of US$2.5m.
Phungula has a background in telecoms infrastructure with roles at Seacom, Cisco and Ericsson. He left Seacom in November to pursue the project.
