After the Canadian government announced it would invest over a billion dollars in the low-Earth orbit (LEO) constellation, Telesat is close to acquiring all of the funding it requires for Lightspeed. The project, which hopes to launch a network of roughly 300 broadband satellites next year, will get $1.15 billion from the government.
In exchange, Telesat is going to invest in the Canadian infrastructure, including hundreds of jobs and scholarships, to build out Lightspeed. It implies Telesat has secured money for Lightspeed in the amount of $4 billion Canadian dollars, more than two-thirds of the total cost. Lightspeed costs $5 billion, according to Telesat.
The remaining funds will mostly come from export credit agencies’ loan financing. The satellites are being built by Thales Alenia Space; a company based in Europe. Relativity Space and Blue Origin, both based in the United States, have signed preliminary agreements to launch them.
Telesat Chief Executive Officer Dan Goldberg stated that the remaining financial obligations for Lightspeed would be secured “in the near term.” In an August 12 statement, Canada’s minister of innovation, science, and industry, François-Philippe Champagne, stated, “Now is the time to enhance Canada’s position as a worldwide leader in the emerging space economy.”
“Our government is generating more high-skilled employment, promoting innovation, and assisting in the unlocking of economic and social prospects in Canada’s most rural and distant communities through its relationship with Telesat. Every Canadian should be able to get high-speed Internet at a reasonable price. We took a major step in the right direction today.”
The government’s investment comprises a loan worth 790 million Canadian dollars over 20 years and 650 million in preferred equity. Warrants that can be converted into shares later are included in the financial package.
Telesat agreed to invest 1 billion Canadian dollars towards Lightspeed’s early capital expenditures in Canada as part of the agreement. The operator also stated that it would hire a minimum of 700 full-time-equivalent personnel in Canada while promoting academic and scholarship efforts, notably those concentrating on women in STEM fields.
Telesat also agreed to pay half of the cost of deploying a Lightspeed constellation (second-generation) in Canada, or about 2.6 billion Canadian dollars if the cost is lower while providing incentives to the government to contribute more. The funding comes barely a week after Telesat announced a five-year investment pact for 109 million Canadian dollars with Ontario’s government. To assist Lightspeed, the Canadian business wants to launch shares on the Nasdaq stock exchange this summer.