WASHINGTON, DC – SatMagazine has published Avascent’s Ian Christensen on the burgeoning trend of Export Credit Agencies (ECAs) worldwide financing more satellite deals in the immediate future than ever before. Often these loans support policies that use space capabilities to create jobs, develop talent, and increase industrial competitiveness. This trend started with the US Export-Import Bank (Ex-Im Bank) as well as France’s Compagnie Française d’Assurance pour le Commerce Extérieur (Coface). Ex-Im has provided an estimated $4.8 billion since 2002 to finance more than 60% of US-manufactured satellites. It also has recently supplied $150 million to support Bulgaria’s purchase of a geostationary communications satellite from US based Space Systems/Loral (SSL). Meanwhile Coface provided $225 million this year to finance Malaysia’s MEASAT 3b, which Airbus Space & Defense manufactured in France.
As ECA activity in the space and satellite sectors expands, it would benefit from closer links between national export promotion and space policies.”
Other ECA’s have followed suit in seeking to finance satellite manufacturing both at home and abroad, including UK Export Finance, Export Development Canada, and the Japan Bank for International Cooperation. “ECAs generally seek to provide financing necessary to help businesses turn opportunity into sales; and do not typically seek to recoup a market return on loans provided (instead seeking only coverage of operating costs).” As lenders of last resort, ECAs are nonetheless, competing to finance satellites in emerging markets. For example, six multinational banks have submitted proposals to back the purchase of Bangladesh’s first geostationary communications satellite. While ECA financing may have played a limited role in the satellite industry in the past, that is set to change moving forward.
Read the full article here.