China to take over Uganda’s only international airport over accumulated debts

Uganda is on the verge of losing its only international airport to China.

China loaned Uganda N8.52 billion in 2015 to expand the airport.

Part of the agreement leaked includes China can take over the airport and other assets.

Ugandan government begged for renegotiation, but China refused.

On 17 November 2015, the Uganda government, represented by the finance ministry and the Civil Aviation Authority at the time, signed an agreement with the Export-Import Bank of China (Exim Bank) to borrow U$207 million at two percent upon disbursement, with a maturity period of 20 years including a seven-year grace period.

It has now emerged that the deal signed with the Chinese lenders contains some clauses which include a ‘surrendering’ of its most prominent airport if it can’t pay back.

The Uganda Civil Aviation Authority (UCAA) which raised the alarm says some provisions in the Financing Agreement expose Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.

UCAA managing director, David Kakuba, also warned that failure to amend the clauses could expose government assets to attachment and take over by China.

Local media reports that China rejected pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.

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