China loaned the Solomon Islands US$66 million to construct 161 towers which will be supplied by Huawei, a move to boost coverage in rural areas, reported The Guardian.
The Solomon Islands stated its ambition to deploy 48% of the towers by November 2023, to boost coverage in time for the Pacific Games, the success of which is a key aim for the current government.
Secretary of finance McKinnie Dentana said the deployment will boost connectivity in rural areas enabling citizens there to watch the games. Currently, the Solomon Islands has less than 30% internet penetration, a figure the government is aiming to boost to improve key services such as schools and hospitals.
Another company will own the new Huawei towers on behalf of the government and negotiations are in place to have Solomon Telekom Company Limited (STCL) be an operating partner of the towers.
The pacific island nation said the deal was the start of a “historical financial partnership” and the two countries will “work closely to ensure the successful implementation … of the project”.
China’s Exim Bank will supply the loan at an interest rate of 1%. The use of Huawei gear will cause concern for Australia which banned the use of the vendor's equipment in its networks.
Huawei has been ostracised by countries in the western world since 2019 when the US issued a ban on using infrastructure equipment from the Chinese vendor. The UK followed suit in 2020 by ordering operators to cease the installation of Huawei gear for 5G rollouts.
Australia and China have grappled in the Solomon Islands through the island's telecoms network. In 2018 the archipelago island switched allegiance from Taiwan to Thailand and awarded Huawei a contract to build an underwater cable network. The Australian government offered to jointly fund the subsea cable construction, which was accepted.