TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 154

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GUANGDONG POWER PROJECT FINANCE MISSION TO GUANGDONG, JUNE 1982

NOTE OF A MEETING HELD IN MR HAVELOCK'S OFFICE 01 HOIDAY 17 MAY AT 3.00 PH

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The purpose of the meeting was to discuss the UK response to the invitation to visit Guangdong from 1hr Chen Gang of GPC and Mr Stones of CLP.

Preparatory Step

It was agreed that a mumber of preparatory steps would need to be completed before any Goverment led mission visited Guangdong.

It was agreed that soundings should be taken on the Hong Kong Covernment's position on the problems associated with the financial structure of the muclear power company as presently envisaged in the feasibility study. Specifically it was agreed that there was a need to sound the Hong Kong Government on the following points:-

a) Whether the Hong Kong Government would be prepared to support CLP in entering into an offtake agreement with the Chinese to buy power from the proposed nuclear plant;

b) Whether the Hong Kong Government would be prepared to put up a counter-guarantee to a 100% Bank of China Guarantee for the foreign loans involved in the project;

c) Whether the Hong Kong Government would be prepared to contenitate taking an equity involvement, possibly through the proposed, Hong Kong Fuclear Investment Company.

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It was agreed that it would be prudent to take initial soundings of Mr Cater, before raising these issues with Mr Brembridge, the Financial Secretary of the Hong Kong Goverment, on his visit to the UK at the beginning of June. It was thought likely that discussions with Mr Brembridge would need to be followed by further discussions in Hong Kong to obtain a conclusive answer to these questions. Such further discussions as prove necessary might be undertaken by a UK mission on its way into Guangdong.

One further point which would need to be explored with the Hong Kong Government would be the view they took on the security of supply from the proposed Guangdong plant, and how electricity from this source would fit into the Hong Kong Government's overall thinking on the Scheme of Control.

Secondly, it was agreed that it would be vital to hold further discussions with

Stones, the Deputy General Manager of CLP, before he returned to Hong Kong at the end of the month. It was agreed that a discussion should be hold with Mr Stones on 25 Hay, probably chaired by Mr Mancie, and including