Quick appraisal of major project application : development of rural area information technology broadband network RAIN

The project aims to develop a network infrastructure offering wholesale broadband services in rural areas of Lithuania which are currently not served and where there are no plans for coverage in the near future. The Lithuanian authorities aim to improve broadband availability for Lithuanian citizens and businesses in rural areas by tackling the lack of necessary broadband infrastructure. It is expected that the creation of backhaul (i.e. middle-mile) network in not served areas will reduce the entry barriers (by lowering investment costs) for commercial operators and thereby will encourage them to extend their broadband network coverage in rural areas. The network should offer open wholesale access basis to third-party operators who will be able to add their access infrastructures (i.e. the last mile network segment) and deliver broadband services to end-users. The initial project RAIN1 ("the project RAIN1") was implemented in 2005-2008. The project was partly financed by ERDF funds. The total value of the project amounted to LTL 74 million (EUR 21.4 million). Within the scope of project RAIN1, 3,375km of the optical cable lines were constructed and 467 townships got access points to broadband network infrastructure. In 2011, ERDF financing was approved for project RAIN2 ("the project RAIN2") that was aimed to the further expansion of broadband network in Lithuanian rural areas. The project RAIN 2 (officially: a Development of Rural Area Information Technology Broadband Network RAIN (project code No. VP2-3.2-rVPK-01-V-01-00)) is financed by Economic Growth Action Programme's priority Information Society for All measure No. VP2- 3.2-IVPK-01-V Broadband electronic communications networks. The project RAIN2 is implemented by the Ministry of Transport and Communication of Republic of Lithuania with a non-profit organisation Plačiajuostis Internetas, which was established for the implementation of this project. During the implementation period of RAIN2 (2010-2012), Plačiajuostis Internetas has received requests from the service providers, state and public sector institutions to connect additional objects to the broadband infrastructure in rural areas of the country (about 1,000 objects), as demand for broadband network service for those objects was identified. This application dossier focuses on the application for the expansion of the project RAIN2. The main objective of the "Quick Appraisal" of this large project applying for EU co-financing is to verify how well the project has been planned to assess the financial and economic feasibility and whether the application submitted to the Commission is compliant with the requirements established in the relevant regulations governing the use of EU funds.