XN000022-1974-04-26 — Page 2

FRIDAY, APRIL 26, 1974

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HONG KONG TO SEEK US $50 MILLION LOAN FROM AD8 REQUEST RECEIVES STRONG SUPPORT FROM AUSTRALIAN REPRESENTATIVE

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HONG KONG IS TO OPEN DISCUSSIONS SHORTLY WITH THE ASIAN DEVELOPMENT BANK FOR FURTHER LOANS AMOUNTING TO ABOUT US $50 MILLION TO FINANCE A NUMBER OF SELF-LIQUIDATING PROJECTS IN THE NEXT THREE YEARS.

THIS WAS DISCLOSED TODAY BY THE FINANCIAL SECRETARY, MR. PHILIP HADDON-CAVE, AT THE ANNUAL MEETING OF THE ADB'S BOARD OF GOVERNORS IN KUALA LUMPUR.

MR. HADDON-CAVE, WHO IS HONG KONG'S REPRESENTATIVE ON THE BOARD, TOLD THE MEETING HE INTENDED TO ENTER INTO EARLY DISCUSSIONS WITH THE BANK'S MANAGEMENT WITH A VIEW TO IDENTIFYING SUITABLE LOAN-WORTHY PROJECTS.

THE FINANCIAL SECRETARY RECEIVED STRONG BACKING FROM THE AUSTRALIAN REPRESENTATIVE, SIR JOHN PHILIPS, WHO ENDORSED HONG KONG'S NEED TO BORROW TO FINANCE SOME OF ITS CAPITAL EXPENDITURE AND SAID HE LOOKED FORWARD TO THE BANK +EXTENDING LOANS ON A MODEST SCALE+ IN KEEPING WITH HONG KONG'S NEEDS.

SIR JOHN STRESSED: +THE BANK MUST REMAIN CONSCIOUS OF THE NEED TO RESPOND TO THE WISHES OF ITS DEVELOPING MEMBERS AND, IN DOING SO, IN THE CASE OF SOME OF THE STRONGER DEVELOPING MEMBERS,

IT WILL STRENGTHEN ITS LENDING PORTFOLIO THUS ENHANCING ITS OWN BORROWING STATUS IN THE INTERESTS OF ALL ITS MEMBERS.+

A DESALTING PLANT

SINCE HONG KONG JOINED THE BANK IN 1969 IT HAS ONLY INVOKED ITS BORROWING RIGHTS ONCE

FOR A LOAN OF US $21.5 MILLION FOR BUT THE FINANCIAL SECRETARY FELT THE TIME HAD NOW COME FOR HONG KONG TO INVOKE ITS BORROWING RIGHTS ON A MORE SUBSTANTIAL AND CONTINUING BASIS.+

HAVING REGARD TO THE FACT THAT HONG KONG HAS NO DEBT SERVICING PROBLEM AND CONSIDERING THE NUMBER OF PROJECTS IN OUR CAPITAL WORKS PROGRAMMES LIKELY TO BE REGARDED AS LOAN-WORTHY, MR. HADDJN-CAVE SAID +1 THINK IT WOULD BE WELL WITHIN THE BOUNDS OF FINANCIAL PRUDENCE FOR US TO RAISE LOANS AMOUNTING TO US $75 MILLION IN THE THREE YEARS 1975-77+.

HE ADDED: +NATURALLY WE MUST LOOK TO THE LENDING INSTITUTION IN THE REGION CREATED SPECIFICALLY FOR SUCH NEEDS AS OURS, WHICH INSTITUTION WE BELONG AS A FULLY PAID UP DEVELOPING MEMBER COUNTRY, FOR A SUBSTANTIAL PART OF OUR LOAN FINANCE REQUIREMENTS OF US $75 MILLION DURING THESE THREE YEARS.

+WITHIN FOUR YEARS FROM NOW, THEREFORE, I WOULD EXPECT HONG KONG'S NET OUTSTANDINGS WITH THE BANK TO BE OF THE ORDER OF US $70 MILLION CTHE DESALTING PLANT LOAN AND NEW BORROWINGS), AND I WOULD HOPE THAT THE MANAGEMENT WOULD REGARD LOANS TO HONG KONG AMOUNTING TO A SUM OF THIS ORDER AS REPRESENTING A USEFUL CONTRIBUTION TO THE MAINTENANCE OF A BALANCED LENDING PORTFOLIO.+

MR. HADDON CAVE