PARIS — The Luxembourg government on Oct. 22 confirmed its plans to create a joint venture with commercial satellite fleet operator SES to build a dedicated military telecommunications satellite on which Luxembourg would offer 100 million euros’ ($130 million) worth of service to the NATO alliance for 10 years.

The satellite would use a Luxembourg government-registered orbital location over Europe to provide X- and military-Ka-band capacity for Luxembourg’s own use, as well as the free-access offer to NATO.

The government initially signaled its interest in what is known as the GovSat project in July, saying it would prefer to fulfill its obligations to NATO with capacity that will provide economic benefit to Luxembourg instead of purchasing military aircraft or other hardware produced elsewhere.

In a new twist to the project, the government said the satellite, whose capacity will be sold to individual allied nations in addition to the NATO contribution, will be barred from communicating with armed unmanned aerial vehicles.

It was not immediately clear how Luxembourg would enforce this requirement beyond extracting an oath from NATO and from any other government using GovSat saying the satellite would not communicate with armed drones.

Luxembourg-based SES said in a statement that while the joint venture has not yet been created, nor has the budget been formally approved by the Luxembourg parliament, the company is already in negotiations with prospective suppliers.

“GovSat will be a geostationary telecommunications satellite, operating in frequency bands reserved for military communications, to be positioned on the European [geostationary orbit] arc with coverage areas over Europe, the Middle East and Africa,” SES said. “The exact project costs are subject to final vendor/launch vehicle negotiations. The spacecraft design is well advanced and negotiations with suppliers have commenced.”

In its announcement, the Luxembourg government said the 50-50 joint venture will receive 50 million euros each from SES and the government between 2015 and 2017. The company subsequently will take out a loan of 125 million euros to finance the satellite’s construction and launch.

Beyond the use foreseen by Luxembourg and NATO, “supplemental GovSat satellite capacity will be sold to allied nations and partners, and to international organizations,” the government said. The satellite “will provide capacity at very competitive rates compared to existing military satellites. From the outset, the financial projections suggest that the joint venture will have a good return on investment.”

Luxembourg is one of many NATO nations under pressure from the alliance to increase their military spending. The statement said the satellite joint venture will help keep this additional investment at home, benefiting Luxembourg, which has targeted the space sector as one area offering economic growth potential.

Peter B. de Selding was the Paris bureau chief for SpaceNews.