TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 40

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of this option only gives real room to manoeuvre on the lenght credit since the definitions of UK and local content are fairly

precise.

See Recommendation 9.

OPTION L UK goods plus capitalisation

Subsidy Element

73% interest rate - 46.54% over 12 years and 48.66% over 15 years

10% interest rate 38.87% over 12 years and 40.49% over 15 years

Add 4% to all figures for six year drawdown over 8 year construction period

Advantage

Disadvantage

if local cost support is ruled out this option contains a mixture of

all the elements we can offer for China and gives credibility to the

negotiated contract "best" offer approach

there is room to manoeuvre both on the length of credit and the point

at which capitalisation becomes operative

one of the more expensive options which is particularly sensitive to

fluctuations in the drawdown period.

See Recommendation 10.

OPTION 5 UK goods, plus locals, plus capitalisation

Subsidy Element

-

73% interest rate 54.75% over 12 years and 57.25% over 15 years

10% interest rate - 44.7 % over 12 years and 46.67% over 15 years

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