China CITIC Bank Corporation Limited provides RMB 640.1 million loan for Peace Submarine Cable Project (Linked to Project ID#92354 and #92355)

In 2019, China’s National Development and Reform Commission issued an overseas investment certificate (ID# N3200201900561) for the Peace Submarine Cable Project. PEACE Cable International Network Co., Ltd. (Peace Cable 公司)— a special purpose vehicle and wholly owned subsidiary of Hengtong Marine Cable System Co., Ltd. that was founded in 2018 and registered in Hong Kong — subsequently signed three loan agreements with Bank of China, China Construction Bank Corporation, and China CITIC Bank Corporation Limited for the Peace Submarine Cable Project: an RMB 335,080,000 loan (ID# 544375468083) from the Suzhou Yangtze River Delta Integration Demonstration Zone Branch of Bank of China Co., Ltd. (中国银行股份有限公司苏州长三角一体化示范区分行), an RMB 1,754,810,000 loan (ID# 32250199763600002810) from the Suzhou Branch of China Construction Bank Corporation (中国建设银行股份有限公司苏州分行), and an RMB 640,110,000 loan from the Suzhou Branch of China CITIC Bank Corporation Limited (中信银行股份有限公司苏州分行). The loan from Bank of China is captured via Project ID#92354. The loan from China Construction Bank Corporation is captured via Project ID#92355. The loan from China CITIC Bank Corporation Limited is captured via Project ID#92356 (this project). The borrowing terms of these three loans are unknown. However, it is known that the borrower was expected to use proceeds of these loans (collectively worth RMB 2,730,000,000) to finance approximately 96% of the total cost (RMB 2,835,132,000) of the project. The purpose of the project is to lay 15,000 km of submarine fiber optic cable between Asia, Africa and Europe. The project’s ultimate aim is to reduce latency and provide ‘a new information expressway for interconnection between the regions.’ Phase 1 of the project (spanning 12,000 km) will link France to Pakistan (the port of Gwadar and Karachi) through a single landing point in the city of Marseille (France) using the Europe-Asia route, and to the city of Mombasa (Kenya) via a short route towards the Indian Ocean that will be expanded to South Africa via the PEACE South extension under Phase 2, reaching a total length of 15,000 km. The cable system will also reach Djibouti and Egypt by docking with existing land cables. The system will deploy 200G and WSS technologies, which provide capabilities to transmit 16Tbps per fiber pair. Upon completion, the project is expected to provide a new information super highway for countries in Asia, Africa and Europe, and dramatically reduce the length and delay of routes between China and Africa. Hengtong Marine Cable System Co., Ltd. is the contractor responsible for cable manufacturing activities and Huawei Marine Networks Co., Limited is the contractor responsible for installation activities. The project officially launched on January 15, 2018 and was originally expected to reach its commercial operations date (COD) in first quarter of 2020. However, the expected COD was later pushed out to the second quarter of 2021. The cable and material manufacturing stage of the project commenced in October 2018. Then, in November 2020, PEACE Cable International Network Co., Ltd. announced that the first cable loading for the Mediterranean Segment (PEACE Med) of the network had been successfully achieved. The submarine cable landed in Marseilles, France in October 2021. Orange — the leading telecommunications operator in France – acting as landing party for the PEACE cable in France. Orange, the sole French operator in the industry with existing infrastructure and the technical expertise will be in charge of extending PEACE System to one of Marseille’s major data center where submarine line terminal equipment is located. The submarine cable landed in Mombasa, Kenya on March 29, 2022.

Additional details

1. Hengtong Marine Cable System Co., Ltd. is a wholly-owned subsidiary of Hengtong Group. 2. This project is also known as the Pakistan East Asia Africa Cable Express (PEACE) Project. The Chinese project title is 通信用海底光缆项目 or 通信用海底光缆项目 or PEACE 海缆系 or PEACE 跨洋海缆通信系统运营项目.

Number of official sources

7

Number of total sources

21