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This week, the U.S. and key diplomatic allies in the Asia-Pacific region announced an agreement to jointly finance construction of of an undersea fiberoptic cable to the coral-rich Micronesian Republic of Palau. The strategic telecom infrastructure project, valued at approximately $30 million, will ensure reliable, secure digital connectivity in Palau.

The so-called Palau spur cable will be the first project under the Trilateral Infrastructure Project between the United States, Japan and Australia, which the allies formalized in November 2018. The Trilateral Partnership reflects a shared commitment to promoting an Into-Pacific region that is free, open, inclusive, prosperous and secure, through support for infrastructure projects that are sustainable, transparent and high quality.

Palau, which was a U.S. “trust territory” under American administration until 1994, is one of a small clutch of nations that maintain full diplomatic recognition of Taiwan.

The spur

The spur cable will connect Palau to a new undersea cable which will span the Indo-Pacific region from Singapore to the west coast of the United States. That cable—the world’s longest— is being funded by the U.S International Development Finance Corporation in cooperation with Nevada-based Trans Pacific Networks LLC.

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.

As a nation in free association with the United States, the State Department notes, 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, and providing more than half of the population with internet connectivity.

But Palau has no service connection back-up in times of fiber outages or service disruptions, which is an impediment to its economic 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.

“Free and open Indo-Pacific”

A U.S. State Department statement lauded Japan for its commitment to expanding cooperation with the Pacific Island countries through “All-Japan” efforts in pursuit of a free and open Indo-Pacific. Japan has contributed approximately JPY 61 billion (about $580 million) in development assistance for Pacific Island Countries since the 8th Pacific Islands Leaders Meeting (PALM 8) in 2018.

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.

Australia’s Minister for Foreign Affairs and Minister for Women, Senator the Hon. Marise Payne, said this week that the the project highlights Australia’s close friendship with Palau.

“Australia and Palau have a strong bilateral relationship,” Minister Payne said. “As part of Australia’s Pacific Step-Up, Australia recently opened its first Embassy in Palau. This presence bolsters Australia’s diplomatic network – already the largest in the region of any country.

“We are very pleased to work alongside Japan and the United States to support Palau’s vision to strengthen its global internet connectivity.”

Australia will contribute around $10 million (U.S.) to the Palau cable project. This includes $1.4 million for a marine survey and branching unit, and a loan of approximately $9 million from the Australian Infrastructure Financing Facility for the Pacific (AIFFP) to help finance the construction of the cable.

The statement from the Australian Foreign Ministry’s Office noted, “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.”

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