Financial Terms
9 The French have offered standard consensus terms: 11% over
15 years for the nuclear island and 10% over 10 years for the
conventional island. We have offered 10% over 15 years, with a
provision for local costs up to 15% of the UK content, on the
conventional island. Both these offers are subject to
satisfactory guarantees from the Bank of China.
10
My officials believe that some improvement in our financing
principally capitalisation of pre-commissioning interest
offer
J
will be necessary, eventually, if the project is to go forward.
But until we have sounded the French, I do not believe we can
decide what we should say to the Chinese in November.
Depending
on French moves, we may need a collective discussion of the
financing issues on the project shortly after the Summit.
background note on the financing issues is attached.)
(A
Recommendations
11 There are very strong advantages in reaching an exclusive
agreement with the French: we should pursue this vigorously at
the Anglo/French summit.
12 If we can secure an exclusive agreement with the French we
should inform the State Department, Westinghouse and the National
Nuclear Corporation of the UK's change of policy.