China Great Wall Industry, a company that manufactures satellites in China has committed the sum of $550m for equity investment in Nigcomsat (Nigeria Communications Satelite Ltd), the Minister of Communications, Adebayo Shittu has said.
The Minister, who disclosed this during an interview with the Punch Newspaper, said that the investment entails the purchase of two more communications satellites, which would increase the number of Nigeria’s satellites in orbit to three.
The deal is yet to be signed, as a committee is currently evaluating Nigcomsat’s assets in order “to determine what percentage of equity the Chinese firm’s $550m will translate into before a deal is signed between the two entities.”
Meanwhile, the Minister also disclosed that Nigeria was able to get the EXIM Bank of China to finance the purchase of the satellites, after initially proposing a loan deal but only to realise that the country could not afford the required 15% counterpart funding.
In the area of satellite communications, we have one satellite in the orbit. Today, rather than one satellite, we are looking at acquiring two more satellites. We were not only able to get the China EXIM Bank to procure two more satellites, we have got them to agree to fully finance the satellites.
It is not a loan. We have a policy of discouraging taking of loans in this government unless it becomes extremely inevitable. For NigComSat 2 and 3, it is not about a loan; it is about equity participation.
We will have to quantify all the ground equipment and one satellite. The two satellites they are bringing in cost $550m. Now, we will have to quantify the cost of one satellite that we have and the cost of the ground infrastructure. A committee is looking into all of that before we sign the deal.
The Minister justified the acquisition of the two additional satellites, saying that “the good thing now is that the company, which is sponsoring it, is bringing the satellites without our government having to spend a kobo. They are coming in with those two satellites as their equity participation in the running of Nigcomsat-1R.”
He further stated that when the additional satellites are acquired, it will have the capacity to serve the whole of Africa such that Nigcomsat can provide services to other countries in Africa. According to him, “millions of dollars are being spent on satellite companies abroad. Customers do not have confidence in a company that has only one satellite.” Therefore, Nigeria’s acquisition of two additional satellites will dispel this fear and encourage patronage.
Incorporated in 2006, the Nigerian Communications Satellite Ltd (Nigcomsat) operates under the Ministry of Communication. It provides fixed satellite services to customers notably in the broadcasting and telecoms sectors. Following the crash of Nigcomsat 1 (its first satellite in orbit) in 2008, a new one (NigComSat-1R) was launched in 2011. Now the company is hoping to increase its number of orbits to three.
China Great Wall Industry Corporation, established in 1980, it is the only Chinese company licensed to manufacture satellites and facilitate space operation technology. The company’s services also include satellite technology applications, information & electronic products, green energy and consulting services.
