Sep 21 - Oct 04, 2009

China has agreed to provide concessional loan of $199 million for the replacement of PAKSAT-1, Pakistan's first geostationary satellite with a new communication satellite PAKSAT-1R by 2011. The project would cost the south Asian country $222.310 million with the foreign exchange component of $189 million.

Under the commercial contract signed between the Space and Upper Atmosphere Research Commission (SUPARCO) of Pakistan and China's Great Wall Industry Corporation (CGWIC) last October, the CGWIC would launch PakSat-1R in 2011 from the Xichang Satellite Launch Center in the southwestern Sichuan province of China.

Under the deal, the Chinese company would deliver ground control facilities for the satellite to the SUPARCO after it enters orbit. The analysts believe that space and rocket technology from China would help the country achieve her ambitious goals of economic progress and impregnable defence, while the south Asian country in return can assist China in space by establishing a station on its soil to track the Chinese satellites.

The two countries signed the Paksat-IR satellite procurement contract during the first state visit of President Asif Ali Zardari to Beijing last year. The launch of new communication satellite would have great economic implications for the south Asian country.

Export-Import Bank of China will provide concessional loan, amounting to 1.35 billion Yuan ($US199 million) to implement new communication satellite, PAKSAT-1R project. The two countries are expected to sign the framework agreement for the loan under which the project for utilizing the loan will be approved by the two countries and be evaluated and reviewed by the lender. The Chinese government has agreed that Export-Import Bank of China will first provide an amount of 800 million Yuan and the remaining amount would be provided during the project period for continuous financing of the project.

Under the loan deal, the maturity period of the loan will not exceed 20 years, including five years of grace period. The rate of interest, applicable on the loan, will be two percent per annum. The Chinese government will pay interest subsidies of the loan to the lender directly.

Established in 1962, SUPARCO is the national space agency. PAKSAT International (Private) Limited is the commercial arm of SUPARCO. The company has successfully established a solid customer base for PAKSAT-1 across Middle East, Africa, South Asia, and Europe.

Launched in February 1996, PAKSAT-1 operates at orbital location of 38∞ East Longitude and offers C and Ku band coverage in over 75 countries. It serves a number of regional customers including, TV broadcasters, telecom companies, data and broadband internet service providers as well as government organizations. Being the first in a series of communication satellites, it will be replaced before its end of life in 2011 by PAKSAT-1R to ensure continuity of service.

The country approached China for arranging over $200 million financing for the replacement of PAKSAT-1 in order to achieve a big success in national space program.

China's CGWIC is the satellite's chief contractor for launching service. The PAKSAT-1R project is expected to increase the teledensity and introduce the latest satellite communication facilities in the country. With a contract value of $222.26 million, the project is planned to be financed 85 percent through foreign loan and 15 percent through Pakistani government. Paksat -1R, the new communication satellite will have 30 transponders, 12 in C-Band, and 18 in Ku-Band, each of 36 MHz Bandwidth.

Pakistan's space program is aimed at furthering research in space science and allied fields, enhancing indigenous capabilities in space technology and promoting the peaceful applications of space science and technology for the socio-economic development of the country. The country's space program largely owes to China's cooperation that spans from climate science, clean energy technologies, clean water technologies, cyber-security, basic space to atmospheric and earth sciences and marine sciences.

The country's first satellite Badr-A was launched by China to orbit in July 1990 from Xichang Launch Center in Sichuan province. Both sides also plan launching of a joint satellite in space and to form a working group of SUPARCO and the Chinese Space Centre to negotiate the purchase of satellites from China. In August 2006, China committed to work with Pakistan to launch three earth resource satellites over the next five years. China is actively engaged in the setting up Asia-Pacific Space Cooperation Organisation (APSCO), which would be based in Beijing. China can help Pakistan in developing and launching satellites.

China has created a new, powerful carrier rocket with military capabilities that can launch multiple satellites into space, according to a report published by United Press International (UPI) in April. The rocket supports China's strategy of marketing satellites, communications technologies and launch services. Referring to the recent Zhuhai Air Show, the report claimed that China introduced a high-capacity LM-5D carrier rocket with a diameter of 5 meters at the core section, bundled with one 2.25-meter-diameter booster and two 3.35-meter-diameter boosters. The carrier rocket has a length of 60 meters, a takeoff weight of 675,000 kilograms and the capacity to send targets of 10,000 kilograms into geostationary transfer orbit. The initial flight of the rocket is expected no later than 2014. The rocket is capable of deploying multiple satellites and has outstanding capability for orbit maneuvering and orbit transfer. It can function in orbit for seven to 10 days.

China's sales of space technologies overseas have so far focused on its traditional allies, such as Pakistan, and oil-rich countries like Venezuela and Nigeria. Last October China signed a contract with Pakistan to provide a communications satellite and launching service. This was China's third such foreign contract, as it had earlier produced a communications satellite for Nigeria and launched it in May 2007, and it did the same for Venezuela with a successful launch in October 2008.

The country will replace its Paksat-I satellite with the new Geo-Synchronous Orbit (GSO) satellite, for which an agreement will be signed with a foreign firm. The strategic objectives of the Paksat-IR project are (i) to enter into a long-term relationship with the satellite manufacturer for acquiring know-how and transfer of technology to produce various kinds of satellites in future, with the ultimate aim of achieving self-reliance in this area; (ii) to establish, maintain and operate necessary satellite ground control stations for controlling Paksat-1R from within Pakistan; (iii) encourage participation of local industry in this project to the maximum feasible extent; (iv) design assembly, integration, and testing of both space and ground segments and gradually move towards undertaking the same activities for all subsystems of communication satellite; and (v) to market Paksat -1R transponder capacity to government and private sectors at competitive prices.