Cover photo courtesy of Andøya Space.
“This is an historic day for Andøya and for Norway as a space nation. Andøya Space will be an engine of transformation for the island and the community, and it will provide a significant boost to Northern Norway. In a short time, Norway will be one of few countries that are able to launch satellites from its own territory,” says Prime Minister Erna Solberg (H).
As a direct consequence to the new launch site, Andøya Space expect to create up to 150 new jobs. Additionally, it is predicted that the launch site will stimulate increase in employment for customers and suppliers. The first satellite launch from Andøya is expected to take place during the third quarter of 2022.
“This means new employment and new high-tech business with state ownership. Both the technology and the market are under development. Andøya Space will now play in an exclusive, international league, were competition and quality requirements are high,” says Minister of Trade and Industry Iselin Nybø (V).
NOK 365.6 MILLION IN EQUITY AND GRANTS
In June 2020, the Storting (Norwegian Parliament) gave Andøya Space a conditional commitment, up to NOK 282.6 million in equity and NOK 83 million in grants, to establish a launch site for small satellites on the Arctic island. In order to receive the financing, Andøya Space had to document that the equity would provide the state with a financial return, corresponding to what a rational market investor would have accepted.
“The launch site on Andøya is an investment with great opportunities, but it also involves great risk. From the government’s perspective, it’s been an absolute requirement to document that the equity invested is on terms a commercial investor would accept,” says Nybø.
Andøya Space has now presented both a better adapted business model and sufficient documentation that ensures the conditions for the Storting's financing decision have been met, which are also in accordance with the EEA Agreement's state aid rules.
“It has been both challenging and time-consuming to process this case. We have a clear expectation that Andøya Space will achieve the results, according to our requirements, set in the business plan,” says Nybø.
Illustration of Andøya Space. Credit: Andøya Space.
EXPECT GOOD COOPERATION WITH OTHER INDUSTRIES
Andøya Space also had to present a plan that ensures that the interests of other industries, such as the fishing industry, are protected in a responsible manner. It has been important for the Norwegian government to facilitate coexistence between the satellite launch site and other industries on and around the island.
“Andøya Space has been in close dialogue with the fishing and the tourism-industry in order to find good solutions for coexistence. We expect the parties to continue to show a willingness for dialogue and constructive cooperation,” says Nybø.
Kongsberg Defence & Aerospace (KONGSBERG) owns 10% of Andøya Space. Geir Håøy, President of KONGSBERG, welcomes the governments’ decision to invest.
“For decades, KONGSBERG has delivered solutions to the international space industry, and is today largest space technology company in the Nordic region. The green light for a new satellite launch site on Andøya is an important milestone, which provides exciting commercial opportunities for us as a company and Kongsberg Defence & Aerospace as a partner. With this new investment, Norway will gain new space-based capacities, which is in line with the Norwegian ambitions of being a leading space nation,” says Håøy.
The Ministry of Trade and Industry will track the investment closely, as a private investors would have done, and will require that contracts with key customers and suppliers to be made available before a majority of a financial pay-out.
Andøya Space and the role of the Norwegian Government
The first request for financing a satellite launch site on Andøya was received by the Ministry of Trade and Industry in February 2019. For the past 2.5 years, there has been a close dialogue between Andøya Space and the Ministry and its advisers on the project, with the purpose of clarifying whether the launch site can be realized as a commercial investment for the state, in accordance with the EEA Agreement's state aid rules.
Since the first request was received, Andøya Space has made significant changes to its business model for the launch site. The changes was necessary to better adapt the business model to the market, but it also made the assessment of the business model extremely demanding. If the government was in violation of this requirement, the project could have been considered illegal governmental aid. Worst case, European Space Agency could have demanded Andøya Space to repay the financing.
Andøya Space has entered into long-term agreements with the German satellite launch companies Isar Aerospace and Rocket Factory Augsburg (RFA). Andøya Space will provide launch services for launching to Isar Aerospace and RFA, while Isar Aerospace and RFA will offer launch services to international customers who need to launch satellites.
Moving forward, Andøya Space will complete contracts with customers and suppliers.
Illustration of small satellite launch from Andøya Space. Credit: Andøya Space.