Japan, Australia, US to Fund East Micronesia Cable System (EMCS)

Japan announced Tuesday that it joined the United States and Australia in signing an agreement on a $95 million undersea cable project that will connect East Micronesia island nations to improve networks in the Indo-Pacific region where China is increasingly expanding its influence.

Japan, the United States and Australia have stepped up cooperation with the Pacific Islands, apparently to counter efforts by Beijing to expand its security and economic influence in the region.

On Monday June 5, 2023, an Exchange of Notes was concluded in Tarawa, the capital of the Republic of Kiribati, between Mr. IKEDA Hirotsugu, Chargé d'Affaires ad interim, Embassy of Japan to the Republic of Kiribati, and Hon. Tekeeua Tarati, Minister for Information, Communication and Transport to the Republic of Kiribati, for a grant aid of 2.40 billion yen to be funded under Japan’s "Economic and Social Development Programme".

The US Department of State also announce Tuesday, Work to Start on East Micronesia Cable Following Contract Signing.

The Australian Infrastructure Financing Facility for the Pacific (AIFFP) has listed the East Micronesia Cable System as one of its investments.

In a joint statement, the parties said the next steps involve a final survey and design and manufacturing of the cable. Completion is expected around 2025.

East Micronesia Cable System (EMCS), Image courtesy: NEC

Spanning 2500km connecting FSM (Pohnpei and Kosra, Kiribati (Tarawa) and Nauru, the Micronesia Cable System (EMCS) is the first submarine cable connection for the islands of Tarawa (Kiribati), Nauru and the state of Kosrae (FSM).

The Micronesia Cable System (EMCS) will be jointly owned and operated by FSM Telecommunications Cable Corporation (FSMTCC), based in the Federated States of Micronesia (FSM), BwebwerikiNet Limited (BNL) of the Republic of Kiribati, and Nauru Fibre Cable Corporation (NFCC) of the Republic of Nauru.

Supplied by Japanese NEC Corporation, the EMCS project costs approximately USD95 million (AUD$135 million equivalent), 100% grant funded by the Governments of Australia, Japan and the United States.

The Governments of the Federated States of Micronesia, Kiribati, and Nauru (the EMC Countries) have accepted funding support from the Governments of Australia, Japan and the United States (the Development Partners) to deliver the East Micronesia Cable project. The Development Partners will collaborate with the EMC Countries to ensure a fit-for-purpose submarine cable provides essential and improved telecommunications connectivity. Australia, via the Australian Infrastructure Financing Facility for the Pacific (AIFFP), is taking the lead role in funding and coordination arrangements. The AIFFP has contracted nem Australasia Pty Ltd as the Project Coordination Unit to support the EMC Countries facilitate management of the overall project. The Project Coordination Unit comprises a team of specialists covering technical, legal, administrative, and environmental/social requirements of the East Micronesia Cable project.

The EMCS project was originally led by the World Bank in associate with the Asian Development Bank. The Governments of FSM and Kiribati were granted fund from the World Bank(World Bank Project Number P130592), and the Nauru Government was granted fund from the ADB (Asian Development Bank Grant Number D004-FM). Chinese HMN Technologies (HMN Tech) was in a strong position to win a bid for the $72.6 million EMCS project, offered at more than 20% below rivals including Alcatel Submarine Networks (ASN) and NEC. But the project reached a stalemate due to security concerns raised within the island nations over HMN Tech's bid. The project's planned connection to a sensitive cable leading to Guam, a U.S. territory with substantial military assets, heightened those security concerns. During the bidding process in 2020, the Government of the United States detailed its concerns in a diplomatic note sent to FSM, which has military defence arrangements with the United States under a decades-old agreement. The note said Chinese firms posed a security threat. So, the World Bank-led project declined to award a contract to HMN Tech to lay sensitive undersea communications cables after Pacific island governments heeded U.S. warnings that participation of a Chinese company posed a security threat. Finally, World Bank-led project sank after U.S. warns against Chinese bid. 

In Dec 2021, the Government of Australia, Japan, the United States, the Federated States of Micronesia, the Republic of Kiribati, and the Republic of Nauru reached a six-country joint statement to improve internet connectivity in the three Pacific nations by providing funding to build the EMCS project, which builds on the strong foundations of trilateral collaboration between Australia, Japan, and the United States in the Indo-Pacific. Later in July 2022, a six-country Memorandum of Understanding was signing for the EMCS project. 

The latest announcements represent the final agreement for Australia, Japan and the United States to fund the $95 million EMCS project.