HC Deb 14 June 1972 vol 838 cc346-7W
Mr. Nicholas Edwards

asked the Secretary of State for Foreign and Commonwealth Affairs what assistance Her Majesty's Government are prepared to offer the Zambian Government to enable them to reach agreement with the International Bank for reconstruction and development on a loan for the power station now being constructed on the north side of the Kariba Dam.

Sir Alec Douglas-Home

Her Majesty's Government are prepared in principle to agree to the proposal put to them by the Zambian Government and by the International Bank for Reconstruction and Development for the release of the Zambian Government from a further portion of their guarantees of Bank Loans No. 145-RN and No. 392-RNS.

In 1970 Her Majesty's Government formally agreed, to the release of Zambia from her guarantee of a portion of these loans to enable her to negotiate a new loan from the Bank for the construction of the Kariba North Power Station in circumstances where her total guarantee obligations for the whole Kariba complex were not more than approximately half of the total of the new and old loans. As announced to Parliament on 19th December, 1969, it was estimated at the time that the consequence of such release was that Her Majesty's Government would be contingently liable for up to £12 million spread over the period 1973–89.

Owing to risen costs and international currency realignments further loan facilities have become necessary, and Her Majesty's Government are prepared in principle to extend the arrangements which were made in 1970. The precise cost of this commitment will not be known until details have been worked out by Zambia and the Bank and agreed with Her Majesty's Government. But preliminary estimates indicate that the previous arrangements and this extension taken together will cost contingently about £13½ million spread over the period 1972–89.

As before, Her Majesty's Government will seek to recover any payments made under this guarantee rearrangement either from the Central African Power Corporation or from the Government of Rhodesia when legality is restored there.

Parliament will be asked in due course to approve a supplementary estimate to cover payments in 1972–73. In the meantime an advance will, if necessary, be sought from the Contingencies Fund.—[Vol. 793, c. 447–8.].