BTRC inks €157m HSBC loan deal

Bangladesh Telecommunication Regulatory Commission (BTRC) yesterday entered an agreement with HSBC to borrow €157.5 million for the country's first space satellite, Bangabandhu-1.

The loan has been agreed at an interest rate of Libor plus 1.51 percent. It is repayable in 20 equal installments within 12 years.

Libor, the London interbank offered rate, is considered to be one of the most important interest rates in finance.

Shahjahan Mahmood, chairman of BTRC, and Mahbub ur Rahman, deputy chief executive officer of HSBC, signed the deal at the BTRC office in the city. State Minister for Posts and Telecommunications Tarana Halim and French Ambassador to Bangladesh Sophie Aubert were also present.

The BTRC had finalised the Tk 1,386 crore deal in July and sent it to the government for approval. The telecom regulator was recently given the go-ahead, said Mahmood.

This is the lowest ever interest rate from the HSBC globally, he added.

State Minister Tarana said although it took quite a long time to finalise the loan deal, the project is being implemented without wasting time.

“It's a project with national pride and we will be able to launch the satellite according to our plan,” she added.

Senior BTRC officials said the HSBC loan will be spent on the satellite's design and installation with an insurance coverage.

Besides, the government will spend another €56.5 million from its own resources for launching the satellite.

The project cost has been estimated at Tk 2,967.95 crore, of which Tk 1,314 crore would come from the government exchequer.

Officials said the cost might come down as the BTRC has received offers lower than the prices estimated two years ago.

Earlier in November last year, the telecom regulator had signed a $248 million deal with Thales Alenia Space, a French aerospace manufacturer, to design, install and launch the satellite.

After installation, the satellite will be taken to Florida's Cape Canaveral for launch. It is expected to be launched on the Victory Day (December 16) in 2017, according to project officials.

The BTRC has already paid about €71 million in three installments to Thales after borrowing money from a local bank. The loan would be adjusted after receiving the credit from HSBC.

Meanwhile, the telecom regulator is working to form a public limited company named Bangladesh Satellite Communication Ltd to look after the commercial operation of the satellite.

Senior BTRC officials said they have received approval from the Registrar of Joint Stock Companies and Firms for the new entity.

Bangladesh currently meets its demand for satellite connectivity by renting bandwidth from foreign operators, which costs the country around $14 million a year. The Bangabandhu-1 satellite will save the foreign currency.

According to the Development Project Proforma (DPP) of the project, the scheme would reach break-even point in seven years after the satellite's launch. It would enable the BTRC to sell any spare capacity to other nations.

The satellite is expected to provide services to all South Asian countries as well as Indonesia, the Philippines, Turkmenistan, Kyrgyzstan and Tajikistan, if its frequency is properly coordinated, said the DPP.

The government has further plans to launch two more satellites.