SSL To Build Satellite for Azercosmos in Deal Tied to Radar Tech Transfer

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PARIS — Satellite operator Azercosmos of Azerbaijan has contracted with Space Systems/Loral (SSL) to build the Azerspace-2 telecommunications satellite, which will be operated in geostationary orbit at 45 degrees east longitude in partnership with Intelsat, SSL and Azercosmos announced Oct. 20.

The contract, which had been expected, was signed after a competition that included satellite manufacturers Airbus Defence and Space of Europe, the China Great Wall Industry Corp. and Orbital ATK of the United States.

Industry officials said Dulles, Virginia-based Orbital ATK was the only bidder unable to present an offer with the backing, and associated low-interest financing, of an export credit agency. The U.S. Export-Import Bank has been shut down for new business since July 1.

The selection of SSL, which is owned by MDA of Canada, also brought Azercosmos an agreement on future collaboration on radar Earth observation satellites, an area in which MDA has demonstrated expertise.

“As part of the agreement, MDA, a global communications and information company headquartered in Canada, will provide knowledge transfer cooperation related to radar Earth observation directly to Azercosmos,” SSL said in its announcement of the contract win. Airbus would have been able to offer a similar technology, but Orbital and China Great Wall would have been challenged to provide any radar technology tie-in.

Azercosmos has purchased from Airbus a commercial optical Earth observation satellite, Spot 7, which Airbus continues to use, as part of what the companies have said would be a long-term partnership in Earth observation.

Whether Orbital ATK, builder of the Azerspace-1 satellite now operating at 46 degrees east, would have won the competition even with Ex-Im support is not clear. But the lack of Ex-Im participation did make things more difficult for Orbital ATK insofar as Azercosmos wanted the kind of financing typically provided by export credit agencies — low-interest loans with long repayment schedules that do not start until two or three years after the contract signature, when the satellite is in orbit.

While SSL is based in Palo Alto, California, being owned MDA makes it eligible for backing from Export Development Canada.

Azercosmos and Intelsat of Luxembourg and McLean, Virginia, will share the Azerspace-2 satellite’s capacity. Intelsat will market its share of the satellite under the name Intelsat 38, which will succeed the 15-year-old Intelsat 12 satellite currently at the 45 degree east orbital slot.

The government of Azerbaijan has suggested, but not yet confirmed, that it would contract with Europe’s Arianespace consortium for the launch of Azerspace-2, presumably with the support of the French export credit agency, Coface. SSL said Azerspace-2 is scheduled for launch in 2017, although Azercosmos officials have evoked 2018 recently.

“This new satellite will provide Azercosmos with additional capacity for the increasing demand in the region, and will allow us to continue to bring the best service to our customers,” said Rashad Nabiyev, chairman and chief executive of Azercosmos. “We are pleased to collaborate with two world leaders in the satellite industry.”