TNAG-1058-FCO40-1308-Guangdong-nuclear-power-station-project-1981 — Page 120

20.

21.

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Mr. Lu asked how it was proposed to raise the necessary finance. I replied that this would have to come from International sources and that subject to the basic conditions of agreement between the Governments

concerned and with the guarantee of the Bank of China there should not be too much difficulty.

The question would be as to who could give the most favourable terms and charge the lowest interest during the time the loans were outstanding.

Mr. Lu said he was under the impression that CLP had

suggested China supplying coal in some form of barter

agreement.

I said this was not essential to the nuclear project. The loans could be secured against an off-take agreement whereby CLP would purchase an agreed amount of power.

22.

If some other trade arrangement involving coal was

entered into as well it might enable the outstanding loans to be paid off quicker which of course would

be advantageous.

23.

Mr. Lu asked which banks would be involved in financing

I said that in the case of the Tap Shek Kok power station, there were several loans and some thirty

International banks were involved.

24.

Mr. Lu said he was relying on me. I said he could

speak with the authority of a government but that I was only a civilian with very limited power. My reason for wishing to deal with the U.K. was that I had good contacts with the British and Hong Kong Governments and I felt it would be easier for me to arrange a satisfactory

package with them, than with others.

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