WASHINGTON — The Export-Import Bank of the United States is evaluating nearly $2 billion in applications to finance space industry sales as it seeks to return to a field that has changed significantly over the last few years.
The Ex-Im Bank had been a major source of financing for commercial satellites and launches prior to its lapse in authorization in 2015 and lack of a board quorum, which prevented it from approving deals larger than $10 million. Bank officials previously estimated it provided $5 billion in financing for sales of satellites and launches by U.S. companies prior to that hiatus.
With the bank’s quorum restored in May 2019, and a seven-year reauthorization passed in December 2019, Ex-Im is now getting back into the space industry. “We have no more issues of board quorums. We have no more issues of potentially lapsing charters,” said Stephen Renna, chief banking officer at Ex-Im, during a session of Euroconsult’s World Satellite Business Week Virtual Edition conference Nov. 10.
Renna said the bank is currently evaluating applications for export credit financing from the space industry. “Currently we have almost $2 billion in applications that we are actively working on right now, and easily another billion of business development opportunities that are in our pipeline,” he said.
He didn’t go into specifics on the applications under review, but said they went beyond the types of deals Ex-Im approved before its hiatus, which were primarily for the construction and launch of geostationary communications satellites. “The industry has changed significantly as far as the technology and also the companies that are involved,” he said.
However, he suggested Ex-Im was cautious about supporting some ventures with new technologies. “We have to be involved in a technology that is proven,” Renna said. “There has to be a commercial viability so we can underwrite it to get to this reasonable assurance of repayment.”
Another change in the industry has been a broader availability of capital, at least before the pandemic shook up financial markets earlier this year. Renna said Ex-Im sees its place in the industry to help projects with large upfront costs that might be difficult to finance exclusively with private capital.
“Our role is to fill financing gaps that the private sector cannot fill,” he said, be they small or large projects. “When you have export credit agencies in there taking early risks as lenders in the development stage, that can also draw in private sector lenders behind that to also fill in gaps.”
“There are a lot of factors that have to come together to make it work, but it’s really the only option that is available to particularly these larger space technology projects,” he said.