TNAG-1497-FCO40-2055-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 289

CONFIDENTIAL

OF BANK OF CHINA AND ARE NOT HAVING SUCH SUCCESS. THIS IS

INTERESTING VIS-A-VIS OUR POSITION WITH GEC.

21988 - 1

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WE ARE CONSIDERING WITH FRENCH WHETHER TO ASK OUR

AMBASSADORS TO MAKE AN APPROACH ON OUTSTANDING ISSUES AND FROM OUR POINT OF VIEW, PARTICULARLY ON THE QUESTION OF INCORPORATING MOU IN LA. WE REMAIN FIRM THAT THIS CAN ONLY BE DONE BY SIDE

LETTER BUT WE WOULD CONSIDER PUTTING IN THAT SIDE LETTER

REFERENCE TO WILLINGNESS TO LOOK AT QUESTION OF PREMIUM IN EVENT THAT LOAN IS PREPAID IN ACCORDANCE WITH TERMS OF LOAN AGREEMENT. 5.2 SUGGESTS CHINESE RIGHT ARBITRARILY TO CANCEL LOAN. GEC ARE RIGHTLY CONCERNED IF THIS SHOULD HAPPEN DURING DRAWDOWN PERIOD

AND NO RIGHT SHOULD BE ALLOWED TO CHINESE TO DO THIS. AT 4.2 IN THE AIDE MEMOIRE WE HAD INTENDED TO SAY QUOTE THIS LETTER COULD ALSO CONFIRM THAT, AS REQUESTED AT 5.2 OF THE BANK OF CHINA MEMORANDUM, THE BANK OF CHINA WOULD HAVE THE RIGHT OF PREPAYMENT OF THE LOAN IN ACCORDANCE WITH THE TERMS OF THE LOAN AGREEMENT

AND THAT IN THESE CIRCUMSTANCES AND AT THAT TIME HMG WOULD CONSIDER THE APPROPRIATE PREMIUM CHARGE. UNQUOTE. HOWEVER, GEC PLC (LANE) WANTS US TO RESTRICT PREPAYMENT TO PERIOD AFTER DRAWDOWN AS HE FEARS PREPAYMENT DURING DRAWDOWN COULD PREJUDICE

HIS RECEIPT OF PAYMENT. OUR STANDARD WORDING (WHICH WAS SHOWN TO GEC SOME TIME AGO) ALLOWS PREPAYMENT AT ANY TIME. GEC WANT TO BE ABLE TO GET AN ALTERNATIVE FORM OF PAYMENT POSSIBLY BY

ILC. IT SEEMS TO US CHINESE UNLIKELY TO GIVE UP RIGHT TO PREPAY

AT ANY TIME AND WE NEED TO KEEP TO OUR STANDARD WORDING. IT

WOULD BE FOR GEC TO WRITE INTO CONTRACT THAT THEY WANT ILC TO COVER COSTS IN EVENT OF PREPAYMENT BEFORE END OF DRAWDOWN.

SUSPEC WE WOULD COVER THEM ON BOC ILC BASIS IN THOSE

CIRCUMSTANCES. IF CHINESE LIKELY TO AGREE TO THIS PROPOSED

WORDING FOR 4.2B IT COULD BE INSERTED RESTRICTING PREPAYMENT TO

POST DRAWDOWN POSITION. WE LEAVE IT TO YOU AND GEC SHENZHEN TO

DECIDE WHETHER THIS GOES IN.

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DEFAULT.

WE ARE NOT QUITE CLEAR ON FRENCH ATTITUDE TO CROSS

I

IF THEY HAVE IT WITH OURS WE WANT PARITY. THE CHINESE

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CONFIDENTIAL