New Dawn bags R250m loan

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 16 Mar 2009

The African Development Bank has approved a loan of $25 million (R250.7 million) for the construction of the New Dawn satellite, which is being spearheaded by Intelsat and South African investor Convergence Partners.

Convergence Partners executive Idan Segal says the bank now joins Nedbank and the Industrial Development Corporation, which have collectively provided the $215 million (R2.16 billion) debt facility for the satellite project.

“The debt sizing hasn't changed, only the number of providers,” says Segal. “We think it is a great endorsement from the bank and the project represents a milestone in terms of African ownership and funding for commercial satellite projects.”

The deal for the satellite, worth more than $250 million (R2.5 billion), was signed late last year and has already seen more than $350 million (R3.51 billion) in pre-orders. A South African consortium, led by Convergence Partners, chaired by Andile Ngcaba, has a 25.1% stake in the New Dawn satellite.

Lift-off in 2010

Segal says the project is on track for a 2010 completion and early 2011 commercial activation. He adds Arianespace will be in charge of launching the satellite from French Guiana, on the northern coast of South America, during the fourth quarter of next year.

An African Development Bank statement says the satellite project comprises the design, construction, launch and operation of a pan-African communications satellite into the 33^AO east orbital location. The satellite, which is expected to start operating in 2011, will service the continent in terms of cellular backhaul, Internet backbone, corporate networking, TV relay and broadcasting.

“Previously, most of the satellite capacity used by Africa was originally designed for Europe and for years African demand has far outstripped supply. The New Dawn satellite is being built from scratch to provide critical communications services, such as IP trunking, cellular backhaul, corporate networking and direct-to-home television broadcasting specifically to meet the needs of African customers,” says Segal.

Further loans

The bank has also invested in several other major ICT development projects, including a $50 million (R501.4 million) loan to the Rascom telecommunications satellite project. The project involves the construction and launch of an earth-orbiting satellite system which will provide point-to-multipoint telecoms services throughout Africa.

The bank also loaned more than $14.5 million (R145.4 million) towards the construction of the East Africa Submarine Cable System. The undersea fibre-optic cable along the East Coast of Africa is set to connect more than 20 coastal and landlocked countries to one another and the rest of the world.

It has also signed a loan agreement with MTN Cameroon, worth more than 13 million euros, to cover the extended loans from banks in Cameroon and Gabon. The telecoms deal was said to be vital in the growth in GSM usage by businesses and the general public.