China Eximbank provides $200 million preferential buyer’s credit for NigComSat-1 Communications Satellite Project (Linked to Record ID#68693)

Project narrative

On December 15, 2004, Nigeria's National Space Research and Development Agency (NASRDA), the Ministry of Science and Technology of Nigeria, and China Great Wall Industry Corporation (CGWIC) signed a $311 million commercial contract for the in-orbit delivery of a NigcomSat-1 communications satellite. The contract included 15 years of operational support services, a comprehensive training program, and an insurance policy. The NigComSat-1 Communications Satellite Project officially commenced on February 21, 2005. Then, on January 12, 2006, China Eximbank and the Government of Nigeria signed a $200,000,000 preferential buyer’s credit (PBC) agreement for the NigComSat-1 Communications Satellite Project. The PBC carried the following terms: a 12 year maturity, a 5 year grace period, and a 3% interest rate. The final maturity date of the loan is March 21, 2018. As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank PBC (loan) had achieved a 100% disbursement rate ($200 million) and the borrower had made interest repayments worth $40.02 million and principal repayments worth $200 million to the lender. As such, the loan’s (principal) amount outstanding, as of December 31, 2020, was $0. According to Nigeria’s DMO, the loan was fully repaid as of June 29, 2018. In anticipation of the launch of Nigeria’s first communications satellite, Nigeria’s Federal Ministry of Communications Technology established a state-owned company called Nigerian Communications Satellite (NIGCOMSAT) Limited on April 4, 2006. It was envisaged that NIGCOMSAT Limited would sell fixed satellite services to much of Africa and Italy. The NigcomSat-1 communications satellite was equipped with 28 transponders on board in four frequency bands (8 Ka-band, 14 Ku-band, 4C-band and 2 L-band). In order to satisfy the coverage area requirements, the satellite was fitted with a total of seven shaped communication antennae. With a lift-off mass of 5,086 kg, the satellite was to be positioned at 42 degrees east longitude over the equator, with an end-of-life power of over 8KW, and a design orbit life span of 15 years. On May 14, 2007, NigComSat-1 was successfully launched from the Xichang Satellite Launch Center (XSLC) aboard an enhanced LM-3B (LM-3B/E) launch vehicle. Then, on July 6, 2007, CGWIC delivered the NigComSat-1 satellite in orbit to Nigerian Communications Satellite Ltd. (NigComSat Ltd.), along with a tracking station in Kashi of China's Xinjiang Uygur Autonomous Region and one fully operational ground station in Lugbe district within the capital city of Abuja. A project completion ceremony was held on July 16, 2007. NigComSat-1 was China's first commercial in-orbit delivery telecommunications satellite. However, on November 11, 2008, NigComSat-1 failed in orbit after running out of power due to solar array anomaly. On March 24, 2009, the Nigerian Federal Ministry of Science and Technology, NigComSat Ltd. and CGWIC sighed a commercial contract for the in-orbit delivery of a replacement communications satellite for NigComSat-1 called NigcomSat-1R. The commercial contract for NigcomSat-1R was partially financed with insurance from the original commercial contract for NigComSat-1. It was also financed with a second loan from China Eximbank. In 2010, China Eximbank and the Government of Nigeria signed a $20.1 million loan agreement for the NigComSat-1 Communications Satellite Replacement Project (or NigComSat-1R Communications Satellite Project). The borrowing terms of this loan are unknown, but Nigeria’s Debt Management Office (DMO) refers to the loan as “largely concessional”. The NigComSat-1 Communications Satellite Replacement Project officially commenced on May 29, 2009. After making technical improvements to address the issues led to the de-orbiting of NIGCOMSAT-1, Nigeria's National Space Research and Development Agency (NASRDA) and CGWIC successfully launched NIGCOMSAT-1R into orbit on December 19, 2011. At the time, Nigeria’s President, Goodluck Jonathan, said that NIGCOMSAT-1R would have a positive impact on national development in various sectors such as communications, internet services, health, agriculture, environmental protection and national security. NIGCOMSAT-1R was successfully delivered in-orbit on March 2, 2012. Then, on March 19, 2012, an official In-orbit delivery ceremony took place.