On Monday, the Export-Import (EXIM) Bank of the United States, the country’s official export credit agency, announced that it has unanimously approved $80.7 million in EXIM funding to support launch services by Elon Musk‘s commercial satellite launch and rocket production company, SpaceX, and to provide U.S.-brokered launch and initial in-orbit insurance for Spanish satellite telecom provider Hispasat Canarias S.L.U.
The transaction marks EXIM‘s first financing of a satellite-related export since 2015, before it was forced to pause board-approved transactions for several years due to the lack of a board quorum. EXIM said the announcement marked “an important step in EXIM’s re-emergence” following the agency’s historic seven-year reauthorization by Congress in 2019.
500 U.S. jobs
EXIM said its support was needed for this transaction to provide long-term financing for Hispasat that was unavailable from commercial lenders, as it seeks to deploy a new satellite, the Amazonas Nexas. The U.S. agency’s support, which may take the form of a direct loan or loan guarantee, is estimated to support around 500 American jobs in California, Florida, Texas and Virginia, and also counters potential export credit agency support for a French launch-services competitor, Arianespace.
“This transaction signals the return of EXIM in support of the U.S. satellite-related industry. The need for export credit agency support is well-established in this industry, and the availability of EXIM’s financing enables SpaceX and other U.S. exporters to remain competitive,” said EXIM Acting First Vice President and Chairman James C. Cruse.
“It is exciting to be supporting SpaceX as they launch this new satellite for Hispasat. This is precisely where EXIM plays a critical role, supporting high-tech U.S. companies and their workers in an intensively competitive environment. This transaction is a fine example of how EXIM is available for U.S. exporters, especially when the decisions of international buyers hinge upon the availability of government-provided export credit,” said EXIM Board Member Judith D. Pryor.
“During the present contraction in financial markets, EXIM continues to carry out its mission by providing financing when private lenders lack the capacity to do so,” said EXIM Board Member and former Congressman Spencer Bachus. “In addition, one very positive outcome of the action we took today will be the preservation of approximately 500 U.S.-based jobs.”
The high-throughput satellite, being built by aerospace group Thales Alenia Space of France, will be launched on a SpaceX Falcon 9 rocket. The satellite will replace Hispasat’s Amazonas-2 satellite, which will reach the end of its 15-year life in 2024. The satellite will offer an increased capacity for new business and enable Hispasat to expand its customer base and enter new markets by supplying high-capacity mobile services. The satellite construction contract was awarded in late 2019 and is being financed by French public investment bank Bpifrance.
