825.51/9–1145: Telegram

The Acting Secretary of State to the Ambassador in Chile (Bowers)

777. Chilean steel mill project approved by Board Trustees Eximbank Deptel 728 Sep 1173 authorized amount not exceeding $28,000,000 to Fomento to assist financing purchase U.S. equipment and services subject to such conditions as Bank may require including assurances satisfactory to Bank with regard to following points: Unconditional guarantees by Govt Chile as to repayment credit and interest and availability of dollars to effect such payments. Availability of such Chilean investments as may be necessary to meet local currency expenditures including working capital and other expenditures necessary to complete project. Management and utilization first class American technical services with regard to design construction and operation of project.

Credit to be available through Dec 30, 1948 and advances to be repaid in installments over period not exceeding 20 years from that date. Rate of interest on outstanding balances not to exceed 4% per an.

Board also approved second line of credit $5,000,000 to assist in carrying out other Fomento projects. Of this amount approximately $2,000,000 may be used in purchase equipment for hydroelectric power plant and associated facilities to meet power requirements steel mill project. Advances to be repaid in installments over 5 year period from date each note and outstanding balances carry interest 4% per an.

All above subject to final action by Bank. Details loan agreements to be worked out with Dept and Corp.

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