Uganda loses key airport to Chinese lenders

Wednesday 01st December 2021 06:05 EST

Kampala: The Ugandan government has lost its major airport to China for failing to repay a loan, the African media reported. The government failed to reverse a loan agreement with the Chinese which had repayment conditions of attaching its airport. President Yoweri Museveni had sent a delegation to Beijing hoping to renegotiate the toxic clauses. The visit was unsuccessful as China authorities refused to allow any alteration in the original terms of the deal.

The Uganda government, represented by the finance ministry and the civil aviation authority, had on November 17, 2015, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow $207 million at 2% upon disbursement; with a maturity period of 20 years including a seven-year grace period. The deal signed with the Chinese lenders virtually meant Uganda “surrendered” its key airport to China, the report said. The Uganda civil aviation authority said some provisions in the financing agreement expose Entebbe airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.

According to the Daily Monitor of Uganda, the Ugandan government waived international immunity in the agreements it signed to secure the loans, exposing the airport to take over. Recently Uganda’s finance minister Matia Kasaija apologised to parliament for the “mishandling of the $207 million loans” from China bank to expand the airport. However, China’s director-general for African affairs Wu Peng, according to a media report, has dismissed as “illogical propaganda” that they are confiscating facilities from African states because of indebtedness.


China and Uganda deny report

China has denied reports it could take control of Uganda’s international airport if the Uganda govt default on a $200 million loan from Beijing. “The malicious allegation... has no factual basis and is ill intended to distort the good ties that China enjoys with developing countries including Uganda,” a spokesman for the Chinese embassy in Kampala said. The denial followed reports that Uganda could surrender Entebbe International Airport should it default on a 2015 loan from Beijing to expand and upgrade the facility.

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