TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 47

1.

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PRIME MINISTER

GUANGDONG NUCLEAR PROJECT

CONFIDENTIAL

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Mr

нкав NEO

TRED

Baszbly WED

NAD

Seefis

The purpose of this minute is to up-date you and colleagues on

the negotiations on this project;

and to recommend that we

should now make an improved but final credit offer to the

Chinese.

70

2

The French deeply impressed the Chinese with the scale of

their nuclear programme. And in support of their strong

industrial position the French have offered the equivalent of the

UK's credit terms. Their new formal offer is 10% over 15 years.

with support for local costs up to 15% of the French project

content, or equivalent support for capitalisation of

pre-commissioning interest and the Chinese have now told my

officials that the French have undertaken to consider further the

case for full capitalisation of interest and other measures which

would reduce the effective interest rates on the loans. I think

we must assume that some further French inducement will be

forthcoming if the Chinese decide to place the whole project with

Building on this, the French have proposed to the

the French.

Chinese that they should take the lead on the whole project,

offering GEC some sub-contract work on the conventional island in