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The Office of the Prime Minister of Norway

10/11/2021 | Press release | Distributed by Public on 10/11/2021 04:20

Go-ahead for satellite launch base on Andøya

Andøya Space has been approved funding amounting to NOK 365.6 million. The Norwegian Government is therefore giving the go-ahead for the establishment of a launch base for small satellites on Andøya.

"This is a historic day for Andøya and for Norway as a space nation. Andøya Space will become a driver for the economic transformation of the community on Andøya and will provide a boost for the whole of Northern Norway. Norway is hereby becoming one of very few countries capable of launching satellites from its own territory", says Prime Ministry Erna Solberg (Conservative Party).

"Andøya Space expects up to 150 new jobs in connection with the launch base. This is technology that is currently being developed and Northern Norway will therefore receive several exciting and modern, specialised and highly skilled workplaces. There is considerable competition in the field and the requirements for quality are high. Andøya will have to continuously develop in order to keep up", says Minister of Trade and Industry Iselin Nybø (Liberal Party).

The first satellite launch from Andøya is expected to take place during the third quarter of 2022.

NOK 365.6 million in equity and grants

In June 2020, the Norwegian Parliament (Stortinget) approved a conditional grant to Andøya Space of up to NOK 282.6 million in equity and NOK 83 million in regional aid to establish a launch base for small satellites on Andøya. In order for the funding to be disbursed, 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 base on Andøya is an investment with considerable opportunities but also involves considerable risk. For the state, it has been an absolute requirement to receive documentation that the equity from the state will be invested on conditions that a commercial investor would accept", says Nybø.

Andøya Space has now presented both a better adapted business model and satisfactory documentation that the conditions for the Norwegian Parliament's funding decision have been fulfilled and that are also in accordance with the EEA'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 results corresponding to the business plan for which we have set requirements", says Nybø.

Expecting good cooperation with other industries

The company also had to present a plan that ensures that the interests of other industries, e.g., the fishing industry, will be safeguarded in a sound manner. It has been important for the Norwegian Government to facilitate the coexistence of the satellite launch base and other industries on and around Andøya.

"Andøya Space has had close dialogue with the fishing industry and the tourism industry to find good solutions for coexistence. We expect that the parties continue to show a willingness for dialogue and constructive cooperation", says Nybø.

Kongsberg Defence & Aerospace own 10% of Andøya Space. Group CEO Geir Håøy welcomes the state's investment decision.

"KONGSBERG has for several decades delivered solutions to the international space industry and is currently the biggest space technology company in the Nordic countries. The go-ahead for a new satellite launch base on Andøya is an important milestone that offers exciting commercial opportunities for us as a company and Kongsberg Defence & Aerospace as a partner. Through this new initiative, Norway will gain new space-based capabilities in line with the ambitions that Norway is to be a leading space nation", says Geir Håøy, Group CEO of Kongsberg Gruppen.

The Ministry of Trade, Industry and Fisheries will continue to closely follow-up the investment, in the same manner as a private investor would have done and will set requirements that contracts and key customers and suppliers are in place before the funding is disbursed.

About the state's role in Andøya Space:

The first request for funding for a satellite launch base on Andøya was received by the Ministry of Trade, Industry and Fisheries (NFD) in February 2019. Over the last two and a half years there has been close dialogue between Andøya Space, NFD and NFD's advisors regarding the project. The purpose has been to clarify whether the launch base could be realised as a commercial investment for the state, in accordance with the EEA Agreement's state aid rules.

Andøya Space has made considerable changes to the business model for the launch base since the state was first asked to fund the project. These changes have been necessary in order to better adapt the business model to the market but has also made the assessment of the business model particularly challenging. Had the state benn in breach of this requirement, the project may have been considered unlawful state aid. In the worst case, ESA could have demanded that Andøya Space would have to return the funding.

Andøya Space has entered into long-term agreements with the German satellite launch companies Isar Aerospace and Rocket Factory Augsburg (RFA). Andøya Space will supply infrastructure services for launches to Isar Aerospace and RFA, while Isar Aerospace and RFA will offer launches to international customers that need to launch satellites.

In the period ahead, Andøya Space will complete contracts with customers and suppliers.