TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 83

CONFIDENTIAL

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Use would be made of the expertise and facilities of the Central Electricity Generating Board, especially in respect of the commissioning and operation of the power station. UK Industry would also make use of the experience of the National Coal Board.

The British Government would offer favourable buyer credit terms for an amount equal to 100 per cent of the value of UK goods and services which are to be supplied under the contract.

The buyer credit facility would be denominated in US Dollars. If Sir Lawrence wished, we would explore the possibility of denominating the buyer credit loan in Hong Kong Dollars or other ways of minimising the exchange risk.

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The British Government will, of course, provide all assistance that it can to facilitate export of coal from China and sale of UK mining equipment to China.

A team led by myself together with Lazards, who are advising the department, wishes to visit Sir Lawrence to discuss best means of implementing programme. This would include the feasibility of investment by UK in new Hong Kong company (whose other shareholders might be China Light and Power; PEPCO; and Investing Public) which would purchase facilities. The objective would be for the project to be self financing out of future revenues.