China Eximbank provides $219.3 million buyer’s credit loan for Lao Satellite Project (Linked to Project ID#64695)

In September 2011, China Eximbank and the Lao Ministry of Finance signed an MOU regarding a potential $258.89 million loan for the Lao Satellite Project. Then, on July 11, 2012, China Eximbank and the Lao Ministry of Finance signed a $219.3 million buyer’s credit loan (BCL) agreement for the Lao Satellite Project (captured in Project ID#64699). The estimated borrowing terms of the BCL are as follows: 20 year maturity and an interest rate of 6-month LIBOR (0.730% in July 2021) plus a 3% margin. Then, on November 5, 2012, China Eximbank and the Lao Ministry of Finance signed an RMB 245 million ($38.6 million) government concessional loan (GCL) agreement for the Lao Satellite Project (captured in Project ID#64695). The borrowing terms of the GCL are as follows: 20 year maturity and 2% interest rate. By 2033, under the BCL and GCL agreements, the Lao Ministry of Finance will be responsible for repaying $341 million (including $83 million of interest payments) to China Eximbank. The proceeds of the BCL and the GCL were to be used by the borrower to finance a commercial (EPC) contract worth approximately $258.89 million. This contract was signed by China Great Wall Industry Corporation (CGWIC), China Asia-Pacific Mobile Communications Satellite Company Limited (APMT) and Laos National Authority for Science and Technology (NAST) on February 25, 2010. The purpose of the project was to acquire and launch a satellite (LAOSAT-1) — equipped with 14 C-band transponders and 8 Ku-band transponders — to supply and sell satellite radio, satellite television, and wireless broadband services. It also involved the construction of a satellite ground station on the north bank of the Mekong River with various facilities, including a Satellite Control Center, Studio and Recording Center, Equipment Room, Database Room, Office Area, Exhibition Hall, Canteen and Dormitory. The project officially commenced on December 1, 2012 and a groundbreaking ceremony for the satellite ground station took place on March 28, 2014. However, implementation delays occurred because the borrower did not meet some of the lender’s conditions for disbursement. The lending package was revised in September 2014 (after China Eximbank appointed a British law firm and the Lao Ministry of Finance appointed a Lao law firm to oversee the loan renegotiation process), which triggered the first payment to APMT (which had halted its work). A satellite delivery ceremony took place on September 2, 2015. Then, on November 21, 2015, a satellite was successfully launched by the Long March 3B in Xichang Satellite Launch Center. On February 25, 2016, a joint venture called Lao Asia Pacific Satellite Co., Ltd. (Laosat) was incorporated as the one and only satellite operator in Laos, which formally marked the beginning of commercial satellite operations. In-orbit satellite delivery took place on March 8, 2016. Then, on September 2, 2016, the Lao Ministry of Planning and Investment signed a Concession Agreement with Laosat, granting it the ability to conduct commercial operations related to satellite telecommunication, satellite television and wireless broadband services.

Additional details

1. This project is also known as the Laosat-1 Satellite Acquisition Project. 2. The Chinese project title is 老挝卫星项目 or “老挝一号”卫星项目. 3. Media reports indicate that the BCL maturity date is in 2033, which implies a maturity length of approximately 20 years.

Number of official sources

21

Number of total sources

31