Intelsat to launch $250 mln satellite for Africa
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 poorest continent.
Intelsat and an investment group led by Convergence Partners said in a statement 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 as more people get hooked 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 percent equity and 85 percent debt, with the debt coming in the form of non-recourse project financing provided by African institutions.
Mobile operators Vodacom, joint-owned by Vodafone, Telkom, and 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, and Nedbank and the Industrial Development Corporation of South Africa are the biggest participants in the debt funding consortium.
Intelsat will provide 74.9 percent of the equity and the Convergence Partners-led group will provide 25.1 percent. Intelsat's cash contribution to the project is expected to be approximately $25 million, the statement said.