Ex-Im’s satellite-lending lapse didn’t stop Israel’s Spacecom from buying American

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WASHINGTON — Spacecom is buying its newest spacecraft from an American supplier without relying on financial support from the Export-Import Bank of the United States, according to a company official.

Jacob Keret, a Spacecom co-founder and senior vice president of sales and marketing for Europe, North Africa and the Middle East, told SpaceNews Dec. 21 that the Israeli satellite operator has “no intention at this time to use Ex-Im financing” to build Amos-17.

Spacecom ordered Amos-17 from Boeing Satellite Systems in a $161 million  deal announced Dec. 21 to replace Amos-5, a satellite built by Russia’s ISS Reshetnev around a payload supplied by Thales Alenia Space of France. Amos-5 ceased communicating in November 2015 after a power failure.

Amos-17 is the first satellite Spacecom has bought from a U.S. supplier. The order comes during a vexing time for U.S. satellite builders trying to sell abroad.

The U.S. Ex-Im Bank, a frequently-used source of below-market financing for satellite deals, was closed to new business for nearly half of 2015. Congress passed legislation in December 2015 allowing the bank to reopen, but because its board of directors lacks a quorum, it still cannot finance transactions over $10 million until lawmakers add another member to the bank’s board.

That limitation has taken away a deal sweetener for companies such as Boeing, which has lost two deals — one for the ABS-8 satellite for Bermuda-based ABS and another for Singapore-based Kacific’s first satellite, Kacific-1 — since Ex-Im’s lending window closed. Orbital ATK of Dulles, Virginia, lost a contract last year to build Azerspace-2 for Azercosmos of Azerbaijan, which considered export credit financing as pass-or-fail criteria for any deal.

ABS-8 and Kacific-1 remain unordered, while Azerspace-2 went to Space Systems Loral, a U.S. satellite manufacturer that has access to export credit financing in Canada through its Canadian parent company MDA.

Keret said Spacecom chose Boeing specifically because of the company’s ability to quickly produce the satellite. Spacecom has lost two satellites in less than a year’s time, leaving only three satellites remaining in orbit. Amos-6, a large Ka- and Ku-band satellite from Israel Aerospace Industries, was destroyed in the Sept. 1 pre-launch explosion of a SpaceX Falcon 9 rocket.

“This is the first time we are purchasing a U.S.-manufactured satellite. It was mainly based on the tight time schedule that we have to bring the satellite into the orbit, and Boeing can provide it to us at the right time,” Keret said. “It is planned to be 24 months.”

Amos-17 is planned for launch in 2019 and will use chemical propulsion. Boeing is building the satellite based on its 702 satellite product line, with which the company has moved away from distinct classifications. Whereas Boeing would have previously designated the 8.5-kilowatt Amos-17 a 702MP, or Medium Power, Boeing now describes the 702 series simply as a “scalable product line.”

Mark Spiwak, president for Boeing Satellite Systems International, said the evolution of the 702 series, taking advantage of new technologies like additive manufacturing, is part of the reason why the company can build satellites fast enough to meet deadlines like those of Spacecom.

“We are simplifying and reducing the complexity of all of our spacecraft systems, which provides our customers with a lower-cost system, quicker delivery and improved first-time quality,” Spiwak told SpaceNews Dec. 22. “One way is by enhancing commonality in our satellite platforms with a scalable 702 product line.”

Boeing announced four commercial satellite deals in 2016 — two with ViaSat for the first two ViaSat-3 satellites, one with Cayman Islands-based Global IP for GiSAT, and now Spacecom’s Amos-17. While manufacturers have continued to complain that 2015 and 2016 have both been slow years for the industry in general, Spiwak said the absence of Ex-Im Bank is still being felt on top of this trend.

“We know of more than five non-U.S. satellite sales over the past three years valued at nearly $1 billion that have utilized French and Canadian export credit support. At least three of these sales have closed since the Ex-Im Bank was shuttered, one of which went to a U.S. competitor precisely because of the inability to access export credit through the U.S.,” he said.

“Not all satellite sales require export-credit financing, but for the customers who need export credit, there are few alternatives,” Spiwak added.

Amos-17 carries a more diverse payload than the Amos-5, which featured a large C-band beam for Africa and three Ku-band beams reaching Europe and the Middle East. Keret said the Boeing-built satellite will have much more high-throughput satellite (HTS) capacity for both broadband and broadcast services, with a footprint over the same region.

“This satellite is taking into account the HTS future, therefore we are talking about multiband high-throughput beams on all three bands: Ku, C and Ka,” he said.

Keret said Amos-17’s Ku-band capacity will focus mainly on television broadcasting, while the C- and Ka-band beams will be prioritized for data, VSAT connectivity and cellular backhaul. Amos-17 will have both traditional regional beams and narrower HTS spot beams. Amos-17’s Ka-band capacity will cover all three regions, while its C- and Ku-band capacity will be reserved solely Africa.

Keret said the name change from chronological numbering to orbital position — Amos-17 will be located at 17 degrees east in geostationary orbit —  was in part to break away from the pattern of bad luck Spacecom has had with Amos-5 and Amos-6. Spacecom has yet to decide on a replacement for Amos-6, but is borrowing the Ku-band payload on AsiaSat-8 starting in January as a placeholder for four to five years.