Ex-Im Bank to Continue Support to US Satellite Communications Industry
[Via Satellite 02-20-2014] With more than $50 billion in U.S. exports in FY 2012, the Export-Import Bank of the United States (Ex-Im Bank) is one of the satellite industry’s largest supporters. As one of the country’s fastest growing industries, satellite accounts for a total of 60 percent of all exports financed by the Ex-Im Bank. On Thursday, Feb. 20, at the Washington Space Business Roundtable event, Fred Hochberg, chairman and president of the Ex-Im Bank spoke about the effect that the satellite industry has on the United States economy.
Over the last 50 years, the satellite industry has grown from a mere five satellites to more than 2,500 around the globe. With this growth, the aerospace industry has proved it plays a critical role in shaping the economic future of the U.S., and thus the business of the Ex-Im Bank.
“Private banks frequently don’t have the scale, the risk appetite to be able to move these projects from the design lab, to the factory floor, to the international marketplace,” said Hochberg. “So we’ve been called into play more and more to support satellite sales. Our mission at Ex-Im Bank is to fill in those gaps when the private sector finance markets aren’t there to support U.S. companies doing exports, and that’s particularly true with this industry.”
Since 2010, the Ex-Im Bank has financed more than $4 billion of satellite exports in the U.S. with approximately 16 projects. Through this financing, Hochberg highlighted, the bank has supported more than 205,000 jobs. The U.S. economy, he added, has become more efficient over the years, and the largest single category is in the aerospace industry. Between 2002 and 2009, the Ex-Im Bank was financing $50 million per year in the satellite industry; today, that number is now $1 billion per year in satellite financing.
“It’s the fastest growing sector,” Hochberg said. “Faster than airplanes; faster than energy, faster than infrastructure; nothing is growing as fast as our satellite portfolio. There isn’t another industry where we have that large of a footprint globally.”
The Ex-Im Bank is looking to grow with the industry and support satellite with the growing demand in today’s competitive world, Hochberg said. It wants to be sure any U.S.-based satellite company does not lose a sale to lack of financing, allowing the industry to thrive on the quality of services and products rather than solely on finance.
“We want to make sure that more satellites that are orbiting the Earth say ‘Made in the USA,’ and we want to make sure that the manufactures here and the suppliers, lawfirms, and so forth compete on equal footing with their foreign competition,” said Hochberg.
During the event, Hochberg announced that Ex-Im approved an $80 million loan for Orbital Sciences to support a satellite in Mexico. It has also recently closed on financing for NewSat, Space Systems Loral (SSL), Boeing and Lockheed Martin. Ex-Im Bank has also helped Boeing finance a $500 million all-electric propulsion satellite with a company in Hong Kong.
Hochberg highlighted the importance of the satellite and aerospace industry to the U.S. economy throughout his presentation, and he mentioned SpaceX as one of the nation’s strongest companies in this field.
“This is an all-American company; the supply chains are here, the jobs are here, the manufacturing is here, the launches are here; this is exactly the kind of thing we want to be supporting,” said Hochberg. “SpaceX is working on recycling rockets, which has got to be the ultimate recycling program, if we’re able to recycle rockets. We always talk about how the sky is the limit, but in this case, the sky is not the limit.”
The satellite industry remains an important factor in the future of the Ex-Im Bank. In 2009, when Hochberg first started working there, Ex-Im Bank had more of a country focus, but over the past few years, that focus has shifted to industry. According to Hochberg, the strongest industries for U.S. exports include transportation, satellite communications, power, energy and pharmaceuticals. Ex-Im Bank is now recalibrating teams to understand the industry and business plans of the companies so they know how to better forecast the staffing and resource allocation they will need.
This year, Ex-Im Bank is also up for reauthorization. The bank’s current authorization ends this September, and, according to Hochberg, this is one of the things that make the Ex-Im Bank what it is. Private banks and other government-sponsored lending programs don’t have to undergo a reauthorization process. With this reauthorization, Ex-Im Bank will be able to continue with its support of U.S. industries, including its largest, fastest-growing industry: satellite communications.
“I don’t know, probably many of you in this room do know, where the industry is going next, but I will tell you that we will stand behind you, we will stand alongside you to make sure that as your products and services compete globally, we will make sure you have the financing available so that you can compete on a level playing field that’s going to be entrepreneurial, forward-leaning and innovative in ways that we can support this important industry,” said Hochberg.