PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB4802 Project Name ECOWAS Broadband Connectivity Program Region AFRICA Sector Telecommunications (60%); General information and communications sector (20%); General industry and trade sector (20%) Project ID P116273 Borrower(s) ECOWAS Member States Implementing Agency Relevant Ministries in charge of Telecommunications and IT in ECOWAS Member States Environment Category [ ] A [X] B [] C [ ] FI [ ] TBD (to be determined) Date PID Prepared June 22, 2009 Estimated Date of October 13, 2010 Appraisal Authorization Estimated Date of Board February 11, 2011 Approval 1. Key development issues and rationale for Bank involvement As part of its effort to promote regional co-operation and integration, and to create a unified economic space, ECOWAS member states have long committed to the development of a sustainable regional West African telecommunications market. The Information and Communications Technology sector is given a priority with the hope that greater economic growth and development could be fostered through affordable, reliable and seamless regional communications (voice and data services). Considerable developments have been recorded in the last few years in terms of policy and regulatory reform of the ICT sector of ECOWAS Member States, resulting in improved access in the sub region. Despite improvements, the ECOWAS region still lags behind the rest of the World in terms of access and price as well as in terms of readiness of the different countries for advanced ICT enabled applications. In addition, the goal of creating a fully integrated telecom market in the sub-region remains to be achieved. Connectivity gaps at international, regional and national levels constrain the ECOWAS region s efforts to achieve the goal of an integrated ICT market and from reaping the full benefits of a highly functional and effective ICT sector. Connectivity gaps also prevent the region from capitalizing on innovative applications to improve service delivery in both the public and private sectors. The lack of adequate transmission infrastructure (within and between national telecom systems) is one of the weakest links in the drive towards greater integration, of the region as well as of ICT markets. There is considerable interest among governments in the region to address the existing sector constraint and develop an efficient West African telecommunications market as key to promoting regional integration, economic growth and development of member states. Some studies have been undertaken in the region to assess options for infrastructure sharing among countries, and relative costs/benefits of terrestrial and satellite backbone infrastructure. The main activity of the proposed ECOWAS Broadband Connectivity Program is to leverage and commercialize the excess fiber communications capacity on the high-voltage cross-border power transmission infrastructure of the West African Power Pool (WAPP), in order to create a seamless regional transmission network and interconnect all ECOWAS countries. A
regional transmission network based on WAPP power lines would serve as a regional backhaul network, interconnecting all countries and aggregating traffic for the submarine cables which serve the ECOWAS Region. It would provide redundancy to existing routes to submarine cables, a diversity of routes, and complete the missing gaps where other connectivity projects such as the Intelcom II program have not yet been fully implemented. The World Bank approved in FY05 a horizontal APL West Africa Power Pool program which is a cooperative power pooling mechanism for integrating the national power system operations in ECOWAS countries into a unified electricity market. WAPP includes the development of an extensive network of high voltage cross-border power transmission infrastructure, all embedded with fiber optic cables. It is expected that significant excess fiber capacity will be available for commercial use. The result of a feasibility study confirmed the feasibility of the project, highlighting the costs savings in leveraging the WAPP fiber (estimated cost of equipping about 8,000kms of fiber to connect 15 ECOWAS countries would be US$38.5m-50m instead of between US$90-200m for buried cable). The World Bank Group is well-placed to support the region and the individual countries in pushing for key reforms and strategies for harmonizing policy and regulatory frameworks, mobilizing private investment, structuring PPPs, as well as leveraging existing infrastructure investment in Africa. The IFC has gained a good reputation for its expertise in structuring PPPs for telecom transactions at both the national and regional levels. The ECOWAS Connectivity Program fits well with WBG s strategy in the region, including in the new RIAS. The program will have a positive impact on the overall growth of the economy. At the microeconomic levels ICT investment reduce transaction costs, increase market coverage and competitiveness and create significant opportunities for job creation and income generation both at the national and regional levels. 2. Proposed objective(s) The program seeks to contribute to lowering the cost of connectivity by leveraging alternative networks. The ultimate objective of the program is to reduce fragmentation of West Africa region s economies and support ECOWAS Members to create a more unified regional economic space. In order to reach this objective, the project proposes an integrated approach focusing on improved connectivity in the region which addresses the missing infrastructure links, commercialization of excess capacity, creation of an enabling environment and institutional strengthening to remove existing bottlenecks for both regional infrastructure and applications. 3. Preliminary description The focus of the proposed activity, therefore, is primarily to bridge the connectivity gap in ECOWAS region. This is expected to be a stand alone program which builds on the opportunity of the WAPP transmission lines, provides additional links to national and international infrastructure where there are gaps, and leverages the capacity for more advanced applications at both the national and regional levels. To maximize flexibility and client-responsiveness in a multi-country environment, the program has been designed around 3 components Component 1 - Creating an Enabling Environment for regional Connectivity and applications This component will focus on creating an enabling environment to (i) address policy and regulatory bottlenecks at both regional and national levels to maximize the benefits of the proposed connectivity agenda, and (ii) to enable regional e-government application
Component 2 - Designing regional PPP framework and Institutional strengthening This component will focus on transaction design for the commercialization of the excess fiber. Based on detailed demand studies and detailed financial analysis, a PPP framework will be designed dealing with structural and ownership questions, management of the network, rights and obligation of different players including electricity providers, telecom operators, the private sector and different national governments. The PPP framework would focus on principles of open access while maximizing the role of the private sector. This component will also support adoption of the business models by all the national and regional institutions involved in the telecoms and electricity sector in all ECOWAS members with clear incentives for countries that will not join in APL 1. Component 3: Infrastructure component: Supporting Connectivity for ECOWAS countries: will focus mainly on creating a regional backhaul link leveraging the excess fiber of the West Africa Power Pool project. In addition to regional connectivity, and in order to maximize flexibility, client-responsiveness and address specific national needs, the ECOWAS Connectivity Program will include activities related to international connectivity, especially for countries without access to international submarine cable (landlocked countries and fragile/post conflict countries) as well as activities to address terrestrial networks ( backbones) in selected countries. The approach that will be used for the infrastructure component will focus on minimizing Government funding and leveraging private sector investment. Lending Instrument The lending instrument will be a Regional IDA Adaptable Program Loan (APL), designed around 3 phases: Phase 1 includes Zone A countries (Burkina Faso, Côte d Ivoire, Ghana, Togo, Benin and Nigeria,) phase 2 will include Zone B countries (Mali, Senegal, the Gambia, Guinea Bissau, Guinea, Sierra Leone, Liberia) and phase 3 will include countries that are unable to join previous phases. This phasing reflects phasing of WAPP Program and the existence of infrastructure which can be leveraged. A vertical APL is proposed within the proposed Horizontal APL. APL 1 A would focus on designing a PPP framework and implementation of the business model to be used to commercialize WAPP excess fiber and address legal and regulatory issues and institutional arrangements for the proposed backhaul. APL 1B would focus on the infrastructure component primarily for Zone A countries. The rationale for this approach is to ensure that all the key preparatory work, including commercial, legal and regulatory bottlenecks are addressed upfront to ensure faster development of the regional network. In addition this approach will allow structuring the PPP framework in advance of the investment component giving, adequate precision of private sector appetite and incentives to participate in financing the proposed infrastructure as well as and ensuring that IDA funding does not displace financing available from the private sector The APL phased approach would allow long-term and sustainable development of ICT infrastructure and services in the region, with a focus on building effective public-private partnerships, leveraging private capital, developing institutions, building capacity, and deepening sector reforms over time. The scope, scale and timing of inclusion into the second and third Phases would depend on the commitment to the sector reforms, the ability of the countries to attract private capital on their own to develop national and cross-border infrastructure.
APL 1 A would focus exclusively on components 1 and 2. APL 1 B and subsequent APLs under the program will target the infrastructure component element (component 3). Detailed technical, financial, commercial and legal studies are expected to be launched in June 2009 with funding from ESMAP and PPIAF. The preparatory work will help further define the proposed PPP structure for the proposed network and provide detailed financial and commercial design for the proposed investment. Funding for detailed feasibility studies was secured. 4. Safeguard policies that might apply In APL 1A, there is no investment component. APL 1 A would focus on designing a PPP framework and implementation of the business model to be used to commercialize WAPP excess fiber and address legal and regulatory issues and institutional arrangements for the proposed backhaul. APL 1B would focus on the infrastructure component for Ghana, Nigeria, Benin and Togo. In APL 1B: At the Regional level, there is no plan to build any infrastructure. The project will equip the cable already buried for the WAPP power lines. The WAPP project has prepared an Environmental Management Plan which has been validated. At the national level, the physical component of the Ecowas Broadband Connectivity Program will consist of building missing links between the power stations where the WAPP fiber ends and the landing station/national infrastructure as well as building of national terrestrial backbones. An ESMF will be prepared and disclosed prior to Appraisal of APL 1 B. Consultations will be conducted in all countries in APL 1 B. The national infrastructure Component of ECOWAS Broadband Connectivity may lead to new land acquisition for terrestrial facilities and ancillary infrastructure. However the specific impact resulting from planned land acquisition and involuntary resettlement, and their locations have not yet been identified. An RPF will be prepared and disclosed prior to Appraisal. The project is expected to be a category B project. ASPEN will review and confirm. An Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF) will be conducted for the ECOWAS Broadband Connectivity Program - at national level - prior to Project appraisal of APL 1 B. The ESMF and RPF will be reviewed by the World Bank and publicly disclosed in all countries participating in the Phase 1 of the Program. A specific Environmental, Management Plan and Resettlement Action Plan will be prepared as necessary for terrestrial facilities during project implementation, in line with ESMF and RFP, once the locations of those facilities have been identified. The environmental and social Assessment will be prepared by June, 2010.
Civil works for the first 12-18 month of project implementation should be screened for environmental and social impacts and EAs / ESMF needed for those sites should be ready for disclosure (along with the draft ESMF) before appraisal. Finally, since the Program will involve PPP schemes, appropriate technical clauses will be prepared and included in the biddings/bindings documents for the Private Entity when necessary, to ensure the execution of agreed environmental and social safeguards measures or instruments. All safeguards instruments prepared for the project should be disclosed 120 days before Board presentation. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) Phase 1 International Development Association (IDA) Subsequent Phases 90 170 Total 260 6. Contact points Contact: Mavis Ampah Title: Sr. ICT Policy Officer Tel: +233 21 214113 / 214100; Fax: +233 21 227887 Cell:+233(0)24 8345220 DAMA: 5337-4113 Email: mampah1@worldbank.org Location: Accra, Ghana (World Bank Country Office) Boutheina Guermazi Title: Sr. Regulatory Specialist Tel: 202 473 9729 E-mail: bguermazi@worldbank.org