China EXIM Bank, firm to fund NigComSat’s $550m satellites

The China EXIM Bank and a Chinese firm, the China Great Walls, have agreed to pay the entire $550m to procure two new satellites for the Nigerian Communications Satellite Limited.

The Minister of Communications, Adebayo Shittu, disclosed this in an interview with State House Correspondents on Wednesday shortly after a meeting he had with President Muhammadu Buhari at the Presidential Villa, Abuja.Shittu explained that the initial arrangement was that Nigeria would provide 15 per cent counterpart funding for the two satellites, while the bank and the firm would provide the balance.

He said Nigeria, however, decided to renegotiate the deal when it became obvious that the country could not afford the counterpart funding.

The minister explained, “Because we could not afford this 15 per cent, we have renegotiated with the China EXIM Bank and the China Great Walls, who are the manufacturers, and they have happily agreed to pay the entire $550m to procure two new satellites.

“The two new ones will ensure that the Nigerian satellite company, which is NigComSat can conquer the entire African continent with regard to the provision of satellite communication services.

“This is a very big business opportunity and I am sure that the Chinese appreciate the potential market, which is so vast, and that is why they have agreed that even without our ability to contribute 15 per cent, they are prepared to pay the entire sum of $550m for the procurement of the two new satellites for Nigeria.”

Shittu explained that it would take two years to produce the satellites.

He expressed the hope that before the end of this month, the parties involved would sign the documents and production would commence.

When asked if the $550m would be in form of a loan, the minister stated, “It is not a loan. It will be equity participation of the Chinese company in our business. NigComSat is a limited liability company owned entirely by the Federal Government. So they are paying that to finance these highly required facilities and we will agree on the percentage sharing.

“Of course, Nigeria has nothing to lose because we are not putting anything into it in terms of financial resources. The President was excited and was not surprised because the Chinese are not just going to market our satellite to the entire African continent, but also perhaps by legislation insists that all Nigerian entities must patronise the Nigerian satellite company rather than going to Israel, UK and US for satellite services.

“Now, we can say by our local content policy that we must patronise Nigeria.”

Shittu added, “The major issue is not about employment but providing satellite services to all companies that require it. Currently, most Nigerian companies and even Nigerian government establishments patronise foreign satellite companies.

“So, the first thing is that we want to make profit; we want to capture the local market and we also want to capture the African market.”

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