According to the Australian Infrastructure Financing Facility for the Pacific (AIFFP), Australia, through the AIFFP, signed a series of agreements with Palau and the Belau Submarine Cable Corporation (BSCC) to provide financing for the construction of Palau Cable 2, an undersea fibre optic cable which will connect to a US-Singapore trunk cable, i.e., the Echo subsea cable system.

The signing ceremony was held on Wednesday, 13 January 2021 in Palau and attended by President Thomas Remengesau Jr., President Elect Surangel Whipps Jr., Australia’s Ambassador to Palau, Richelle Turner and the Chairman of BSCC,  Keobel Sakuma.  

The Palau Cable 2 will reinforce the communications infrastructure of Palau, contributing to increasing its communication capacity and raising the stability of its international communications. With the improvement of the communications infrastructure, the investment environment of Palau will also improve, contributing to promoting investment from overseas and developing the economy of Palau. This economic boost, including local jobs in the cable’s construction, comes at a much-needed time during the COVID pandemic recovery.

In December 2017, Palau connected its first undersea cable. As a result, bandwidth usage in Palau has increased by around seven times in just three years and today, nearly every household in the nation has access to fixed line and mobile telephony. However, Palau does not currently have any internet connections that provide redundancy for its first cable. This is a disincentive for private investment and an impediment to development.

The AIFFP said its support for this project builds on Australia’s support for the 4,700km of the Coral Sea Cable System cable connecting Sydney, Port Moresby and Honiara, as well as the AIFFP’s support to Timor Leste for its first undersea cable.

Foreign Ministers of Japan, the U.S., and Australia announced in Vietnam in October 2020 that this Palau cable project will be the first under the Trilateral Infrastructure Partnership Investment in the Indo Pacific (TIP) . 

The Palau Cable 2 project 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. 

According to the AIFFP, the The AIFFP is contributing approximately USD10 million for the Palau Cable 2 project, including a loan of approximately USD9 million. And the Project partners include BSCC) and the governments of Japan, the United States and Palau.

The total cost of the Palau Cable 2 project is about US$30 million. Additional fund comes from Japan and the United States.

NEC Corporation of Japan is selected as the supplier for the Palau Cable 2 project.