Intelsat, Convergence Partners Form New Dawn Joint Venture to Grow Africa's Telecommunications InfrastructureTuesday, December 9th, 2008
African Satellite Program will Launch Intelsat New Dawn by Late 2010
PEMBROKE, Bermuda, and JOHANNESBURG, South Africa — Intelsat, Ltd., the world’s leading provider of fixed satellite services, today announced a joint venture with a South African investor group led by Convergence Partners that will utilize project financing to build and launch a new satellite into the 33Âº East orbital location, ideally positioned to serve the African continent. The satellite, to be called “Intelsat New Dawn,” will feature a payload optimized to deliver wireless backhaul, broadband and television programming to the continent and is expected to enter service in early 2011. The satellite will be operated and marketed as part of the global Intelsat fleet.
Africa has been one of the fastest growing regions for fixed satellite services in recent years, fueled by demand for critical infrastructure from communications providers and television programmers. Wireless telecom operators, broadband service providers, corporate network service providers and direct-to-home television operators have experienced growth along with the economic development of the region. The New Dawn joint venture was established to provide solutions for African communication needs, and is expected to deliver new capacity for voice, wireless backhaul, Internet and media applications.
The joint venture recently concluded agreements for financing of the project, which is expected to cost a total of about $250 million. The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Nedbank Capital, part of the Nedbank Group (one of South Africa’s largest banking groups) and a leading telecom project financier in South Africa has arranged the debt financing. Nedbank and the Industrial Development Corporation of South Africa, a self-financing national development finance institution, are the largest participants in the debt funding consortium. The equity is to be provided by Intelsat (74.9%) and the Convergence Partners-led group (25.1%), which also includes Altirah Telecoms. Intelsat’s cash contribution to the project is expected to be approximately $25 million.
Over 50% of the satellite’s 28 C- and 24 Ku-band 36 MHz transponder units are under contract, with pre-launch commitments received from leading wireless, network and video service providers such as Vodacom International Ltd., Gateway Communications Africa (UK) Ltd., Zain Nigeria and Gilat Satcom. Pre-orders for satellite capacity, or backlog, currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.
Andile Ngcaba, Chairman of Convergence Partners said, “Today marks an important milestone in the development of Africa’s infrastructure. The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellite’s life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent.”
“Intelsat has provided satellite communications to Africa for more than 40 years. We have witnessed the economic growth realized by our customers when they have access to reliable communications,” said David McGlade, CEO of Intelsat. “The New Dawn joint venture is a great example of the type of creative investments Intelsat will use to further develop our fleet in regions where we believe there is unmet demand. Once in service, Intelsat New Dawn will be an integral part of our global, resilient satellite network, providing growth capacity and allowing us to further expand our services to our long-time customers in Africa.”
The manufacture and launch of the Intelsat New Dawn satellite is expected to be completed by 2010, after which the satellite will join the other 25 satellites within Intelsat’s global fleet that provide Africa with critical transmission services.