African Trade Insurance Agency issues insurance cover for fibre optic project Kenya’s ICT sector benefits from ATI’s Risk Insurance Cover
Nairobi May 21, 2008
African Trade Insurance Agency (ATI), Africa's only multilateral credit and risk insurance Agency, has issued a risk insurance cover for a Euros 19 million (Ksh1.9 billion) national fibre optic infrastructure project in Kenya. The French company, Sagem Communications, has been awarded a contract to construct the National Optic Fibre Backbone Infrastructure ("NOFBI") in the North Eastern and Coast Province of Kenya. The contract is for the provision of the delivery, local transport, installation, commissioning, testing and long term technical support of the NOFBI Cable
The ATI Chief Executive Officer, Peter Jones, said in a statement issued today that ATI?s risk cover will help give impetus to the development of the fibre optic network in Kenya, which will enhance internet services, thereby reducing the communications costs. Jones observed that, "ATI's support for this fibre optic project will therefore be a major boost to the economy since it will reduce the cost of doing business in Kenya and make the country a competitive destination for Foreign Direct Investment".
The CEO added that the rapid development of the fibre optic network in Kenya is crucial for the country to achieve middle income status in 22 years, as envisaged in the Government of Kenya?s Economic Blueprint, Vision 2030. The ICT sector is identified in the blue print as one of the key sectors, which is pivotal to accelerating the rate of economic growth in Kenya.
The CEO explained that the laying out of the fibre optic cable will provide telephone, internet and data connectivity in arid and semi arid areas and the coastal region of Kenya. "Most of these regions have been isolated and are remote from the main stream communication highway and the fibre optic project will enable them access world-class communication services", said Jones. He added that increased internet and data connectivity will strengthen e-learning in schools, since in most of the regions covered by this project, the ratio of the pupils to teachers is very high.
The CEO of Sagem Communications, Patrick Sevian said he was pleased with the insurance cover from ATI. "The importance of the fibre optic in Kenya cannot be overemphasized. It will increase internet and data connectivity and make new business opportunities such as the BPO sector viable. Our partnership with ATI will help us deliver our business promise to the Kenya Government and people".
Africa Reinsurance Corporation, a multilateral reinsurance corporation, supported ATI through the provision of facultative reinsurance, which both institutions hope will be the first of many such partnerships.
Note to Editors:
The African Trade Insurance Agency (ATI) is a multi-lateral international financial institution and legal entity established at the Common Market for Eastern and Southern Africa (COMESA) Summit of Heads of State and Government in May 2000 under the Agreement Establishing the African Trade Insurance Agency, which came into force on the 20 January 2001, as amended on the 20 January, 2007. It is registered with the Secretariat of the United Nations pursuant to the provisions of Article 102 of the Charter of the United Nations.
ATI was created with the technical and financial support of the International Development Association (IDA), a member of the World Bank Group.
ATI's headquarters is located in Nairobi, Kenya.
ATI's mandate is to facilitate, encourage and develop the provision of, and the support for, insurance, including coinsurance and reinsurance, guarantees, and other financial instruments and services, for purposes of trade, investments and other productive activities in Africa in supplement to those which may be offered by, or in cooperation with, public and private investment and credit risk insurers.
Membership in ATI is open to all African States that are members, or are eligible to be members, of the African Union; Non-African States; Regional Economic Organisations; International Development Institutions; Export Credit Agencies and Private Corporations. However, ATI may only support business that benefits entities located in African Member States.
There are currently nine full members of the Agency, namely: Burundi; Democratic Republic of Congo; Kenya; Madagascar; Malawi; Rwanda; Tanzania; Uganda; and Zambia. Djibouti, Eritrea and Sudan have also signed the ATI Treaty and are in the process of completing membership requirements, with Liberia having been accepted into membership and being in the process of signing the ATI Treaty.
In addition, The Common Market for Eastern and Southern Africa (COMESA), PTA Bank and PTA Reinsurance Company (Zep-Re) are members under the category of Regional Economic Organisations; and the Atradius Credit Insurance Group is a member under the category of Private Corporations.
The Agency's paid in capital is US$79 million, with approximately US$60 million in additional committed contingent capital as at 31 March 2008.
ATI has issued insurance policies covering political and commercial risks in 7 of its 9 Member States covering transactions worth in excess of US$600 million. In the last year alone it has also supported exports worth over US65 million. The sectors supported include; telecommunications, manufacturing, agribusiness, education, export, services, hotels, mining and residential housing. Beneficiaries include manufacturers/exporters of goods/services located in Member States, regional and international banks who are providing financial support to regional businesses and investors into the region, and the overall business community in its Member States.
ATI's Products and Services include:
|Political Risk Insurance for Trade and Investment|
|Comprehensive Non-payment Insurance on Sovereign, Public and Private Obligors|
|Inter- and Intra-regional and Domestic Whole Turnover Credit Insurance|
|Mobile Assets Insurance|
|Unfair calling of Bonds Insurance|