CONFIDENTIAL
FM FCO
TO PRIORITY HONG KONG
TELNO 668
OF 161205Z APRIL 92
CONFIDENTIAL
111764
MDLOAN 3454
нав MAAR 102/1
FROM: PETER FREEMAN, HEAD OF INTERNATIONAL DIVISION, ODA
YOUR TELNO 1022: FINANCING OF AIRPORT CORE PROGRAMME PROJECTS: POSSIBLE ADB LENDING
SUMMARY
1.
SOME QUESTIONS ABOUT PROPOSAL IN TUR.
DETAIL
2. YOUR TUR HAS BEEN PASSED TO ODA, WHO ARE RESPONSIBLE FOR ISSUING INSTRUCTIONS TO OUR EXECUTIVE DIRECTOR AT THE ASIAN - DEVELOPMENT BANK (ADB). WE: CLEARLY WOULD WISH TO HELP YOU TO% CREATE THE BEST POSSIBLE CONDITIONS FOR RAISING MARKET FINANCE FOR THE ACP PROJECTS. HOWEVER WE HAVE A NUMBER OF QUESTIONS ABOUT THE PROPOSAL TO SEEK A LOAN FROM THE ADB.
3.
**
PARAGRAPH 3 OF TUR REFERS TO YOUR HIGH LEVEL OF ECONOMIC DEVELOPMENT. YOUR GDP PER CAPITA IS INDEED MORE THAN TWICE THE INFORMAL CUT-OFF POINT OF ABOUT US?4,500 AT WHICH REGIONAL MEMBER COUNTRIES. ARE EXPECTED TO BE ABLE TO BORROW ON COMMERCIAL MARKETS RATHER THAN FROM THE: ADB. WE ARE NOT (NOT) ADVERSE: TO09 SPECIAL PLEADING ON YOUR BEHALF, BUT IT WOULD CLEARLY WEAKEN OUR OVERALL. STANCE IN FAVOUR OF DIRECTING✩ADB":RESOURCES: AT THE 41 POORER COUNTRIES, AND WE SHOULD WANT TO BE SURE THAT THE BENEFITS WOULD BE WORTHWHILE.
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4. ON THE COST OF BORROWING OTHER NON-BORROWING EAST ASIAN COUNTRIES (EG KOREA) AND SOME TRADITIONAL BORROWERS. (EG THAILAND) HAVE RECENTLY BEEN FINDINGEITTCHEAPER TO BORROWE COMMERCIALLY THAN FROM THE: ADB WEEPRESUME THIS IS NOT YOURS REASON FOR? SEEKING A LOAN. BUT, GIVEN THAT YOU HAVE NOT Thath PREVIOUSLY APPROACHED ADBTM IS THERE A DANGER THAT THE MARKETS. MIGHT SEE IT AS A SIGN OF WEAKNESS ON YOUR PART: COR OF THE LEVEL OF RISK INVOLVED IN FINANCING THE ACP) RATHER THAN A SIGN OFF REASSURANCE? WE RECOGNISE YOU WILL HAVE CONSIDERED THESE ISSUES: WITH MORGAN GRENFELL: WE WOULD FIND IT HELPFUL TO UNDERSTAND THEIR AND YOUR ANALYSIS.
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MAI CONFIDENTIAL