$250m satellite for Africa in pipeline
Private-fund owned satellite firm Intelsat and a South African investment consortium plan to build and launch a $250-million satellite to serve Africa and improve communications on the continent.
Intelsat and an investment group led by Convergence Partners said on Tuesday that the “Intelsat New Dawn” satellite was expected to enter service in early 2011 and would be funded by project financing.
Demand for fixed-satellite services in Africa is growing given increased investment on the continent and an increase in the number of people hooking up to phones, the internet and pay TV.
Poor communications are cited as a deterrent for foreign investment.
The companies said the project would cost about $250-million and would be funded with 15% equity and 85% debt, with the debt coming in the form of non-recourse project financing provided by African institutions.
Mobile operators Vodacom, joint-owned by Vodafone and Telkom, and Kuwait’s Zain have indicated they will use the satellite, and pre-orders for capacity or backlog total more than $350-million.
Nedbank Capital, part of the Nedbank group, and a telecom project financier in South Africa, have arranged the debt financing.
Nedbank and the Industrial Development Corporation of South Africa are the biggest participants in the debt-funding consortium.
Intelsat will provide 74,9% of the equity and the Convergence Partners-led group will provide 25,1%.
Intelsat’s cash contribution to the project is expected to be about $25-million, the statement said.