The US Export-Import Bank has approved the guarantee of a US$116.6m loan that will help fund the construction of Azerbaijan’s first communications satellite, AzerSat-1.
The loan, which is being provided by BNP Paribas, has a tenyear maturity and is…
The US Export-Import Bank has approved the guarantee of a US$116.6m loan that will help fund the construction of Azerbaijan’s first communications satellite, AzerSat-1.
The loan, which is being provided by BNP Paribas, has a tenyear maturity and is being made to Azerkosmos, an entity set up by the Azerbaijani government to management the satellite’s commercial operations.
Phil Cogan, vice president at the office of communications at ExIm Bank told SatelliteFinance that the loan is also being guaranteed by Azerbaijan Ministry of Finance.
He added that the tenor of the facility was dictated by international rules. “The repayment term is the maximum tenure permitted for this type of asset under the OECD Arrangement,” Cogan said. This Arrangement, which was first agreed in 1978, places limitations on the terms and conditions of officially supported export credits, including minimum interest rates, risk fees and maximum repayment terms.
The interest on the loan was not disclosed with Cogan saying that it was a commercial interest rate negotiated between BNP Paribas and the Government of Azerbaijan. It is, however, likely to be extremely competitive given both the ECA’s guarantee of approximately 95% of its value and the second guarantee by the Ministry of Finance.
One party not referenced under the terms of the loan is Malaysian satellite operator Measat. In mid-2010, the Azerbaijani Ministry for Communications and Information Technology signed an agreement with Measat for the joint development of the 46E orbital position, where AzerSat-1 will eventually be located. Under the deal, Measat moved its MEASAT-1 satellite to the orbital slot in 2008 thereby enabling the Azerbaijani government to satisfy ITU rules over filing orbital slots in a specific timeframe.
Further details on the agreement between Measat and Azerkosmos have not been released, although some local reports have claimed that the former may access to as much as 45% of the new satellite’s capacity.
Meanwhile, SatelliteFinance understands that Azersat is negotiating a similar agreement with Coface for the satellite’s launch with Arianespace, expected to be for a similar amount.
AzerSat-1 is to be built by Orbital Sciences and will be based on the STAR-2 platform, containing 36 Ku- and Cband transponders. The satellite is due to be launched by Arianespace in late 2012.