COMMERCIAL IN CONFIDENCE
GUANGDONG NUCLEAR POWER STATION
No!
probably
week
of 12 Ant
MUS
(Notes of meetings in Hong Kong 39th April to 2nd May 1992)
During my visit to Hong Kong I had two meetings with Bill Stones and Steven Poon together with Win Bischoff. I also had a separate meeting with Lord Kadoorie and Sir Sidney Gordon. Notes of these meetings are set out below.
Lord Kadoorie and Sir Sidney Gordon
I explained the problems of financing the proposed Guangdong Nuclear Power Station (GNPS), in particular those which arose from the proposal that Hong Kong Nuclear Investment Company (HKNIC) should own 40% of GNPS and the resultant implicit pro rata responsibility for cost overruns, provision of guarantees and equity. Kadoorie and Gordon were emphatic that they had always stated to the Chinese that 100% guarantee would be required of the Bank of China if the loans envisaged were to be raised. In this respect Kadoorie drew my attention to the second paragraph of Page 4 of the Feasibility Study Part 1 and Part 4 which is as follows:-
"In GPC's opinion, 60% of the long term loans should be guaranteed by the Bank of China and the remaining 40% should be guaranteed by reputable international banks in Hong Kong and/or U.K. or by ECGD of U.K. However, CLP firmly believes that unless the Bark of China guarantees all foreign loans, it would not be possible to raise the 90% loans required by GNPC."
It was clear from this that we have never received the final versions of these parts of the Feasibility Study and Kadoorie .recommended that we urgently obtain copies from the
Department of Industry.
Clearly I have an apology to make to John Lippitt since he was right in saying the Feasibility Study did include specific reference that China Light considered that a 100% Bank of China guarantee was essential. This was not in the copy of the Feasibility Study which we received from the Department of Industry.
Kadoorie also gave me a copy of the letter which accompanied the Feasibility Study (Attachment 1). He also gave me a copy of some draft minutes of a meeting last June in connection with the Feasibility Study (Attachment 2). These minutes have been submitted to the Peking authorities but they still have not been approved.
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