Failing to repay loan, Uganda loses only airport to China

FPI / December 1, 2021

Uganda has lost its only international airport to China for failing to repay a loan, reports say.

A delegation of Ugandan officials traveled to China earlier this year in an attempt to renegotiate the clauses of a $207 million loan agreement to expand the airport which was made in 2015, according to media reports. But Chinese authorities refused to allow any alteration in the original terms of the deal.

As a result, Entebbe International Airport is now in communist China's hands, India Today reported on Nov. 28.

The last time the Entebbe airport was in the global spotlight was on July 4, 1976, when Israeli commandos stormed the airport to rescue hostages in what is seen as one of the most successful anti-terror operations in history.

Uganda had received the loan from China’s Export-Import (EXIM) Bank with a 2 percent interest rate upon disbursement. The loan had a 20-year maturity period with a seven-year grace period.

As reported by some African media outlets, the Ugandan government dropped the international immunity clause in exchange for the financing and attached Entebbe, its only international airport.

"This means that China can take control of the Entebbe International Airport without the need for international arbitration," Eurasia Times reported on Nov. 30.

The Chinese Embassy in Uganda denied claims of a takeover, noting that the “hype” surrounding China’s “debt trap” in Africa had “no factual substance.”

A statement from the Uganda Civil Aviation Authority (UCAA) reportedly suggested that some provisions in the Financing Agreement with China exposed Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.

Last week, Ugandan Finance Minister Matia Kasaija had apologized to Parliament for “mishandling” the multi-million dollar loan.

Yoweri Museveni, Uganda’s long-serving president, has praised the communist regime in Beijing as the right partner for doing large-scale projects in his country.

Uganda is also among 10 countries which have become “emergent customers” for China's arms exports since 2005.

Free Press International