EXCHANGE OF LETTERS CONSTITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA OF PAPUA NEW GUINEA CONCERNING A LOAN FOR THE PURCHASE OF CERTAIN ASSETS OF THE AUSTRALIAN OVERSEAS TELECOMMUNICATIONS COMMISSION

(Canberra, 10 November 1976 - Waigani, 14 September 1978) 

ENTRY INTO FORCE: 14 SEPTEMBER 1978

[Letter from the Minister for Foreign Affairs of Australia to the Minister for Foreign Affairs and Trade of Papua New Guinea]
I

Minister for Foreign Affairs
Canberra
10 November 1976
The Honourable Sir Maori Kiki, KBE, MP
Minister for Foreign Affairs and Trade
Parliament House
Port Moresby
PAPUA NEW GUINEA
My dear Minister
I refer to letters exchanged between the Australian Minister for Foreign Affairs and the Papua New Guinea Minister for Finance, dated 14 January 1974 and May 1974 respectively, agreeing upon the terms and conditions on which the Australian Government extended a loan of $1 million to the Papua New Guinea Government to assist its purchase of certain assets from the Australian Overseas Telecommunications Commission.
Now that Papua New Guinea is a fully independent State, I believe that our two Governments should record, by way of an exchange of letters constituting a formal international agreement, our confirmation of the terms and conditions previously agreed.
Those terms and conditions are as follows:
Purpose of loan
The purpose of this loan is to assist the Papua New Guinea Government in financing the purchase of the assets of the Overseas Telecommunications Commission in Papua New Guinea.
Amount of loan
The amount of this loan shall be One Million Australian Dollars ($1,000,000).
Period of loan
This loan shall have a maturity of ten (10) years and be repaid in full on 30 November 1983.
Terms of loan
(a) Grace period
During the period of three (3) years ending 30 November 1976 the Papua New Guinea Government shall not be obliged to make any repayments of principal.
(b) Interest
This loan shall bear interest at the rate of three (3) per cent per annum as from 1 December 1973. Such interest shall be calculated on the balance outstanding and payable on 31 May and 30 November of each year during the currency of the loan.
(c) Repayment
The amount advanced ($1,000,000) shall be repaid to the Australian Government in fourteen (14) equal half yearly instalments. The first instalment shall be payable on 31 May 1977 and subsequent instalments shall be payable at six monthly intervals on 30 November and 31 May thereafter until the final instalment has been paid.
Execution of the loan
The Papua New Guinea Government shall ensure that the proceeds of this loan shall be used only for the purpose intended.
On behalf of the Australian Government, I should appreciate your confirmation of the foregoing terms and conditions of this loan and propose that this letter together with your confirmatory reply should constitute and evidence an agreement in the matter between our two Governments to enter into force on the date of your reply.
Yours sincerely
[Signed:]
ANDREW PEACOCK

[Letter from the Minister for Foreign Affairs and Trade of Papua New Guinea to the Minister for Foreign Affairs of Australia]
II

Minister for Foreign Affairs and Trade
Papua New Guinea
Central Government Offices
Waigani
14 September 1978
The Hon Andrew Peacock MP
Minister for Foreign Affairs
Parliament House
CANBERRA  ACT  2600

My dear Minister
I have the honour to reply to your note of 10 November 1976, addressed to the former Minister for Foreign Affairs and Trade, the Honourable Sir Maori Kiki, KBE, which reads as follows:
[Here follows text as printed under I.]
I have further the honour to confirm the above terms and conditions of this loan on behalf of the Government of Papua New Guinea and to agree to your note and this reply shall constitute and evidence an agreement between our two Governments.
Yours sincerely
[Signed:]
N. EBIA OLEWALE