UK Export Finance (UKEF) has inked its largest satellite financing deal to date in support of an Airbus Defence and Space UK contract with Turksat, the Turkish state-owned satellite operator, for two telecom satellites and a ground station.

UKEF, the UK’s export credit agency, is providing an unconditional total repayment guarantee against borrower non-payment to support a loan of US$325mn from Crédit Agricole to the Turkish ministry of treasury and finance for the purchase and manufacture of both satellites, their launch into space, and in-orbit deliveries by Airbus UK. The loan has a 10-year tenor.

The deal is a first for UKEF in its effort to simplify the procurement process for the buyer by combining the manufacture, launch services and launch insurance under one contract. Traditionally, buyers source these three aspects separately and therefore need to negotiate multiple contracts.

In another first, it also sees UKEF take a more active role as a direct loan guarantor on a satellite deal. Previously, it was more common for UKEF to reinsure the UK element of a deal where other ECAs had undertaken the underwriting, as was the case for a facility in 2014, which involved UKEF’s support for an EADS Astrium satellite contract with Measat International worth £22mn.

Reinsurance facilities on the Airbus deal will be sought by UKEF from other ECAs that have a significant national element of the construction.

UKEF tells GTR that the satellite industry is an area it hopes to expand into and it stands ready to assist the sector with further financing facilities.

Commenting on the deal, UK trade secretary Liam Fox says: “The UK continues to lead the way in the global telecommunications industry and this contract demonstrates the ongoing worldwide demand for this expertise.”

Fox hails the facility as a step forward for the UK’s Export Strategy, ­unveiled in 2018, ­which sets a target for the country’s exports to grow from 30% of GDP to 35%. The UK’s department for international trade (DIT) which is spearheading the policy, has not set a hard deadline to achieve this ambition and was unable to say how close it currently is to this goal.

However, HMRC and DIT have confirmed that UK exports continue to grow, rising 3.1% between 2017 and 2018 to a record level of £639.9bn – an increase of some £19.3bn – of which spacecraft, including satellites exports, account for £283mn.

The Export Strategy manifesto highlights aerospace as a “traditional area of strength” for the UK, along with oil and gas, defence and infrastructure.