Uganda’s only international airport could be surrendered over Chinese loan – report

Uganda which took a US$207m loan from China in 2015 is now at risk of having to grant control of it’s sole international airport, Entebbe to Beijing. On Tuesday, 17 November 2015, the Uganda government signed an agreement with Export-Import Bank of China (Exim Bank) to borrow US$207 million at two per cent upon disbursement. The loan had a maturity period of 20 years including a seven-year grace period.

A report in the Nigerian Guardian says that it has now emerged that the deal signed with the Chinese lenders virtually means Uganda “surrendered” its most prominent and only international airport.

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

The report said it has also emerged that China has rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.

According to the Daily Monitor, the Ugandan government waived international immunity in the agreement it signed to secure the loans, exposing Entebbe International Airport to take over without international protection.

The report said that in desperation, Uganda in March sent a delegation to Beijing hoping to renegotiate the toxic clauses of the deal but the officials came back empty-handed as China would not allow the terms of the original deal to be varied.

China has come under scrutiny for encouraging loans to Third world countries with clauses that allow it to take control of vital infrastructure whenever there is a default.