354. Telegram From the Department of State to the Delegation at the Foreign Ministers Meetings in Paris1
Tosec 28.Humphrey,Black and I discussed High Aswan Dam and related projects yesterday. It is clear that British, Egyptians, Sudanese,IBRD and USG, including Congress, will need to be consulted and to agree on many points. We think agreement can be achieved but that it will require prior agreement between the British, [Page 644] the Bank and ourselves before we approach the Egyptians and hope, as suggested in my earlier telegram, we can shortly begin talks here.
Whole project for High Aswan Dam shapes up in our tentative thinking along following lines:
Reduced to simplest terms High Aswan Dam seems to be useful enterprise, total cost of which with its related projects will aggregate, under present estimates, 1.3 billion dollars. Of this amount four hundred million dollars is required in foreign exchange and nine hundred million dollars in domestic funds in Egypt.
With respect to the 400 million dollars,IBRD would be willing lend 200 million at rate of about 15 million dollars yearly provided Egyptians make proper arrangements to implement project, providing there is agreement with Sudan re Nile water and providing balance of 200 million dollars in foreign exchange can be found. With respect to this balance we estimate between 15 and 20 million dollars yearly will be needed for 15 years on grant basis. US and UK will wish to assist in this respect providing Egyptians and Sudanese play their part. This amount would be in addition to other grant aid which US is now giving to Egypt. To start conversations we propose that UK would contribute one-third and US two-thirds of 200 million dollars. Approval of US Congress would be required. US contribution would be spent in US.UK contribution would not be paid out of Egypt’s blocked sterling in London but out of other British funds.
With respect to the 900 million, Egypt would agree to make 60 million available yearly for 18 years in local currency for expenditure in Egypt.
Humphrey and I are planning to see Makins tomorrow and talk to him along lines indicated herein.2
In view Black and Humphrey located in Washington, I suggest subject to your approval we carry on exploratory conversations here rather than in Geneva. If you agree we will of course keep you fully advised.
- Source: Department of State, Central Files, 396.1–PA/10–2555. Secret; Priority. Drafted by Wilkins and approved and signed by Hoover.↩
- See Document 360.↩