FINAL REPORT: DEFINITIONAL MISSION TO AZERBAIJAN:
AZERCOSMOS – AZERSPACE-2 FEASIBILITY STUDY
August 07, 2013
Space Partnership International
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3.1 EXECUTIVE SUMMARY
The U.S. Trade and Development Agency (USTDA) contracted with Space Partnership
International, LLC (SPI) to perform a Definitional Mission to evaluate a proposal from
Azercosmos for a feasibility study regarding the financing and implementation of a second
geostationary telecommunications satellite, “Azercosmos 2.” The principal objective of this
mission was to review the project and provide an independent recommendation to USTDA as to
whether such project meets USTDA's funding criteria. SPI traveled to Baku, Azerbaijan from
April 24 to May 4, 2013 to conduct the mission. Additionally, SPI contacted and interviewed
prospective U.S. vendors for key components of the system, including the spacecraft, launch
services,
ground segment, and insurance as well as officials from potential financing institutions.
The Azerspace-2 program consists of the acquisition of a satellite; launch services; ground
equipment in support of the operations and implementation of the program; technical and
regulatory consultants; and financial services, including insurance. Azerspace-2 is an aggressive
program made distinctive by government ownership.
According to Azercosmos, the satellite is expected to provide Ka-band and Ku-band services,
pending final design to include C-band, which in turn is dependent upon securing the orbital
location and associated radio frequencies for its required coverage area. The coverage area should
back-up the existing satellite’s footprint and provide coverage for Central Asia, Eastern Europe,
and parts of Africa. Azercosmos contemplates a business model based on the sale of wholesale
transponder capacity to customers in Azerbaijan and other countries within the satellite’s service
area. Currently Azercosmos is not considering a broader value-added role to end users.
SPI’s meetings with stakeholders in Azerbaijan as well as prospective U.S. vendors and financial
institutions have revealed a number of drivers that lead SPI to
recommend favorably to USTDA
that it fund a feasibility study for Azercomos’ second satellite:
1.
U.S. manufacturing firms we interviewed expressed interest in supplying goods and/or services for
the project;
2.
The President’s “Azerbaijan 2020 – Future Outlook” directive frames telecommunications and this
satellite program
as a national imperative;
3.
The current need and demand for satellite services is growing within the country and on a regional
basis;
4.
Azercosmos is well-placed to capture the existing demand and fill the current Azerspace-1 satellite
with a potential backlog;
5.
A substantial investment has already been made in the satellite
program with the launch of
Azerspace-1 and the acquisition of a very sophisticated ground station;
6.
The Ministry of Communications and Information Technology (IT) has developed several
initiatives
that will require satellite services. These include introducing an e-government platform across
Azerbaijan that will connect small mountainous villages to a network; back-up facilities to mitigate
fiber interruptions caused by construction; and disaster preparedness in case of earthquakes.
7.
Azercosmos management is young, ambitious, well-trained and thoughtfully incorporated to
include key management positions;
8.
The feasibility study will be used as a foundation for developing
a formal and comprehensive
business plan;
9.
U.S. Export potential is between $122 – 297 million US dollars (USD), depending
on the complexity
of the satellite and how the awards are split for the satellite, launch services, insurance, ground
equipment, and advisory services.