Desarrollo País Announces Advisers For Humboldt Cable

And begins search for strategic partners for Asia-Pacific Fiber Optics

They are going to prioritize those companies that have experience in the development of projects of this nature. The interest of firms with a local presence, such as GTD, Telxius and Claro, would be tested.

By M. Espinosa and V. Osorio
July 6, 2021

With its team of armed advisers, the public company Desarrollo País (ex Infrastructure Fund) began the search for strategic partners that would allow it to promote the Humboldt Project (HCS), the first transoceanic fiber optic cable that connects Latin America with the Asia-Pacific.

It can be one or more partners, but those who accompany the state company will have the task of promoting a pre-sale process, and then carry out the construction. The objective is that the equivalent of 30% of the capex be committed to those interested in using the network, and thus verify that the project causes is attractive to the industry.

“We finalized the invitation to participate to the main operators of the industry in the coming weeks,” says the General Manager of Desarrollo País, Patricio Rey.

One requirement they have defined is that they will prioritize those companies that have experience in the development of submarine cables. These will join the already announced partners from Argentina and Brazil, as well as companies from other countries in the region that may join, such as Paraguay, Uruguay and Bolivia.

Once the feasibility studies carried out by the Subsecretariuat of Telecommunications (Subtel) have been completed, the project is now in the execution stage since the process of forming the SPV (special purpose vehicle) began, a company that will own the infrastructure and that will be estimates that Desarrollo País has a participation of 25%.

The Desarrollo País, Patricio Rey, points out that “we have set ourselves the challenge of transforming Chile into a digital hub for Latin America, and that is why we will specify the invitation to participate to the main operators in the industry in the coming weeks.

They would be targeting international companies, such as Hawaiki, (Which operates a cable between Australia and the United States), Korea Telecom, Telstra (Australian firm), among others.

According to industry sources, they are also testing the interest of firms with a local presence such as GTD, Claro and Telxius.

They hope to have the confirmation of their possible partners by the end of this year and the projection is that the project will be ready by early 2025.

The total investment of the initiative ranges between US $ 380 million and US $450 million but, according to Desarrollo País, “that amount was obtained from the feasibility study, which will then have to be confirmed or could be adjusted once the SPV was created.”

The cable route has also been maintained until now, where the Valparaíso-Sydney route has been defined as the most profitable, with a total length of approximately 14,810 kilometers.

New Manager and advisers

The state firm reinforced its team to continue advancing in the execution of the cable. In this, he recruited Natalia López as the project manager.

She was manager of Subtel's Telecommunications Development Fund, where she began the feasibility studies that today support the foundations of the cable.

In addition, they defined their technical and legal advisers. On the technical side, they hired a consortium made up of the North American companies Telecommunications Management Grou (TMG) and WFN Strategies (WFN), which developed the technical, economic and regulatory feasibility study of the Humboldt Cable. They will support Desarrollo País in the search for strategic partners.