Space42 secures $5.1bn contract from UAE government to boost development of new satellites

The 17-year agreement includes an advanced $1bn payment to speed up the construction of the Al Yah 4 and 5 satellites

Space42's upcoming satellites are being designed to provide secure governmental communications across the Middle East, Africa, Europe and Asia. Photo: Space42

Space42, the Abu Dhabi-based artificial intelligence-powered SpaceTech company, has been awarded a new 17-year contract by the UAE government, that will help speed up the construction of its new satellites and provide more continuity in the development of the key sector.

The Dh18.7 billion ($5.1 billion) agreement will replace two existing contracts that end in late 2026 and will extend the parties' collaboration through to 2043, the company said on Tuesday in a filing to the Abu Dhabi Securities Exchange, where its shares trade.

It will also include Dh3.7 billion in advanced payments to boost the development of the Al Yah 4 and Al Yah 5 satellites, which are expected to be launched in 2027 and 2028, it said. These are being designed to provide secure governmental communications across the Middle East, Africa, Europe and Asia.

For the Al Yah 1 and Al Yah 2 satellites currently in orbit, the new contract will involve providing “secure and reliable” satellite capacity and related managed services, including for operations, maintenance and technology management of ground segment satellite systems, in addition to terminals currently provided under a separate agreement, Space42 said.

The agreement makes up a significant portion of Space42's Dh26 billion backlog of contracted revenue – equivalent to about 10 times the revenue in the past 12 months, as of the end of September – “which provides long-term visibility of future cash flows up to 2043", it said.

This also reinforces its “strong financial profile” and “underscoring the ongoing trust in Space42’s solutions”, Ali Al Hashemi, chief executive of Space42's Yahsat space services unit, said.

“The Al Yah 4 and Al Yah 5 satellites will offer new capabilities to advance our technology and service offerings, enabling us to continue providing our innovative SpaceTech solutions that meet the UAE government’s evolving requirements more efficiently, securely and reliably.”

Space42 was established this year after Bayanat, an AI-powered geospatial solutions provider owned by G42, merged with Al Yah Satellite Communications Company, better known as Yahsat, the UAE’s flagship satellite solutions provider.

The UAE, the Arab world's second-largest economy, has the largest space sector in the region in terms of investment size and diversity. In 2022, the Emirates launched a Dh3 billion fund to support its space programme and a new initiative to develop radar satellites.

In addition, the UAE in October established the Supreme Space Council to oversee the development of its booming sector, with the authority to approve laws and policies before they are introduced.

Space42 is also launching satellites for Earth observation, including the Foresight constellation project.

The Foresight constellation will send high-resolution images of disaster zones from space – regardless of weather – to teams on the ground dealing with extreme events, such as floods, earthquakes or other crises.

The first Foresight satellite – Foresight-1 – was launched in August and others are “going to follow in the next 18 months”, Space42 managing director Karim Sabbagh previously told The National.

“Since receiving the mandate last year, Space42’s Yahsat Space Services business unit has made significant progress in meeting the timelines for the launch of Al Yah 4 and Al Yah 5,” Space42 said on Tuesday.

Space42 made its debut on the ADX in October, part of a flurry of UAE companies tapping into capital markets to raise capital and grow their businesses.