The United States, in partnership with the governments of Australia, Japan, and Palau, will finance the construction of an valued at approximately $30 million. The project will connect to a new U.S. International Development Finance Corporation-financed undersea cable, the world’s longest, spanning from Singapore to the United States. The new spur cable—Palau’s second—will help ensure reliable, secure digital connectivity in Palau, and marks the first project to be delivered under the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific between the United States, Australia and Japan.
Expanding Digital Connectivity in Palau
As a nation in free association with the United States, Palau has made substantial strides rebuilding and modernizing its telecommunications infrastructure with U.S. support. In December 2017, with a loan provided by the Asian Development Bank, Palau connected to the Southeast Asia-United States fiber optic submarine cable that also connects Guam to Indonesia and the Philippines, increasing available bandwidth by around seven times providing more than half of the population with internet connectivity.
However, Palau has no service connection back-up in times of fiber outages or service disruptions, an impediment to development. Connection to a second submarine cable will provide Palau with the redundancy it needs to realize the economic and development benefits of increased and strengthened digital connectivity.
The U.S. Government is providing $4.6 million for the project, including $3.8 million from the U.S. Agency for International Development and $800,000 from the U.S. government’s Transaction Advisory Fund.
In addition, the Republic of Palau is using $7 million in U.S. Government funding made available under the Palau Compact Review Agreement between the United States and Palau.
Belau Submarine Cable Corporation, a wholly owned Palauan state-owned enterprise, will contribute nearly $1 million and will lead the spur cable’s construction.
The Government of Australia will contribute approximately $10 million (USD) to the project, including $1.4 million already invested in the marine survey and branching unit, and a loan of approximately $9 million from the Australia Infrastructure Financing Facility for the Pacific.
The Government of Japan is close to finalizing approval of their financing package through the Japan Bank for International Cooperation and Nippon Export and Investment Insurance.
Trilateral Infrastructure Partnership: Commitment to the Pacific Region
The Trilateral Infrastructure Partnership was established by a memorandum of understanding between the United States, Japan, and Australia in November 2018. The Partnership furthers the three countries’ shared commitment to promote an Indo-Pacific region that is free, open, inclusive, prosperous, and secure, through support for infrastructure projects that adhere to international standards and principles. The Palau spur project is a practical demonstration of the partners’ commitment to meeting the infrastructure needs of the region and promoting secure, resilient, and trustworthy communications networks worldwide.
- It furthers the United States’ Pacific Pledge, a commitment to partner with the Pacific Islands on their most pressing challenges, including on economic and environmental resilience, maritime security, and good governance.
- Since the Pacific Pledge was announced last year, the United States has committed more than $300 million in assistance to the Pacific Islands.
- The project highlights Australia’s strong commitment to the Pacific, as demonstrated by the Pacific Step-up, its AU$1.44 billion (US – $1 billion) of aid committed to the region in 2020-21, and its AU$2 billion (US – $1.4 billion) Australian Infrastructure Financing Facility for the Pacific.
- As a Pacific country and the region’s largest donor, Australia has a strong interest in supporting the region’s prosperity, stability, sovereignty, and sustainability.
- Japan is committed to expanding cooperation with the Pacific Island countries through “All-Japan” efforts in pursuit of a free and open Indo-Pacific, as demonstrated by its contribution of approximately 61 billion Yen (USD – 580 million) in development assistance for the Pacific Island Countries since the 8th Pacific Islands Leaders Meeting (PALM 8) in 2018. This project is another manifestation of that commitment.