US$36bn satellite project
in talks
for ExIm Bank guarantee
Satellite
Finance
Published: 14 Nov 2008
SWANsat, a hugely ambitious satellite project that plans to launch a
constellation of up to twelve geostationary satellites that would operate
the first commercial use of the W-band (71-75 GHz and 81-85 GHz) for
delivery of two-way broadband Information and Communication Technology (ICT)
services worldwide, is currently in talks with the Export Import Bank of
the United States (ExIm Bank) over the latter providing a funding
guarantee of approximately US$30bn.
The project is
the brainchild of William Welty, the founder of DBS operator Continental
Satellite Corp which was sold to Loral in 1996. Welty told
SatelliteFinance that the total cost of the project, which has been in
development for the past twelve and a half years, would be approximately
US$36bn and that the company had retained Bank of America as a financial
adviser.
Welty said
that SWANsat has begun discussions with ExIm Bank and that the bank will
undertake due diligence on the project in the first quarter of 2009, with
a decision by the end the quarter. He added that Bank of America will then
act as a sponsor and will look to find private investment backed by the
funding guarantee. A massive challenge given the current economic climate,
although Welty argued that if the ExIm Bank provides a funding guarantee
then investors will be far more likely to participate.
Welty said
that ExIm Bank is looking to guarantee 85% of the total cost of the
project, with the remaining 15% planned to come from sovereign wealth
funds and African banks. He added that NEPAD (New Partnership for Africa's
Development), a network of ex-pat Africans that seeks to develop the
African economy, has endorsed the project and is introducing it to
potential SWF investors.
SWANsat stands
for Super-Wide Area Network System and Welty said that the plan was to
develop a constellation of fourteen hugely powerful satellites (including
two in-orbit spares) that would provide internet, telecommunications, data
and video worldwide but with its main ambition being to bridge the digital
divide in Africa. He argued that the technology that it has developed
meant that the satellites could generate 10,000MHz of capacity, compared
to around 280MHz for typical DBS satellites, which gave it the capacity to
deliver around 200,000 high definition channels.
The plan would
be to offer Africans these broadband ICT services for around E1 per month.
This would be funded by acting as a single information services wireless
provider to countries in the developed world for a charge of US$100 per
month.
Welty said
that the plan is to launch the first satellite in late 2012 / Q1 2013 and
that SWANsat is currently in negotiations through its vendor Salt Lake
City based IOSTAR Corp to select a prime vendor. A decision is expected by
January 2009, with Lockheed Martin believed to be in pole position.
Construction on the satellites would then begin in the second or third
quarter of 2009.
For more on
this extremely ambitious and expensive project and indeed whether it will
get off the ground at all, see the next edition of
SatelliteFinance.
Used with
permission; cited pursuant to Fair Use.
