§ Mr. William Hamiltonasked the Secretary of State for Foreign and Commonwealth Affairs what assistance Her Majesty's Government are prepared to offer to the Zambian Government in order to enable them to reach agreement with the International Bank for Reconstruction and Development on a loan for a new power station on the northern side of the Kariba Dam.
§ Mr. FoleySubject to Parliamentary approval, and subject to satisfactory arrangements being concluded on the remaining detailed points, Her Majesty's Government are prepared to concur in the proposals put to them by the Zambian Authorities and the International Bank for Reconstruction and Development (I.B.R.D.) for the release of the Zambian Government from the guarantee to I.B.R.D. in respect of a proportion of the Bank's existing loans448W to the Central African Power Corporation (C.A.P.C.) for the Kariba Complex, of which Her Majesty's Government are also a guarantor. The consequence for Her Majesty's Government will be that they will become the sole guarantor of that proportion of the existing loans, and in present circumstances the I.B.R.D. will look to Her Majesty's Government for the servicing payments thereon. The result of the release will be that Zambia will be able to negotiate a new loan from the Bank, in circumstances where its guarantee obligations are not more than approximately half of the total of the new and old loans. The release is expected to take effect from mid-1973 and the sum for which Her Majesty's Government will be contingently liable will be approximately £12 million spread over the period 1973–89. Her Majesty's Government will seek to recover any payments made under this guarantee rearrangement, either from C.A.P.C. or from the legal Government of Rhodesia on their restoration. Token provision to obtain formal Parliamentary approval for this arrangement will be included in an estimate to be presented to Parliament in due course. The Zambian Government and I.B.R.D. have been informed of this decision.