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China Takes Over Ugandan Airport, Assets Over $207million Loan Deal

Chinese lender, the Export-Import Bank of China, also known as Exim Bank, took over Uganda’s Entebbe International Airport and other assets in the country because the Ugandan government was unable to repay a loan.

It did so despite reports that President Yoweri Museveni had sent a delegation to Beijing to negotiate with the Chinese government over toxic clauses exposing the East African country.

The Museveni-led Ugandan government signed an agreement with Exim Bank on Tuesday, November 17, 2015, to borrow $207 million at two percent at the time of the disbursement.

The loan had a term of 20 years, including a seven-year grace period, but it now appeared that the transaction signed with the Chinese lenders practically meant Uganda “delivering” its most prominent and unique international airport.

The Ugandan Civil Aviation Authority (UCAA) announced some provisions in the financing agreement with China that exposed Entebbe International Airport and other Ugandan assets to be confiscated and taken over by Chinese lenders after negotiations in Beijing. However, Uganda attempted to renegotiate the deal, but recent visits and requests to change the original terms with the Chinese authorities were denied.

According to the Daily Monitor, the Ugandan government waived international immunity in the loan guarantee agreement it signed, which allowed Entebbe International Airport to be taken over without international protection.

In desperation, Uganda in March 2021 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.

Last week, Uganda’s Finance Minister, Matia Kasaija, apologised to parliament for the “mishandling of the $207 million loan” from the China Exim Bank to expand Entebbe International Airport.

Progress of works at the airport, built in 1972, has reached 75.2 percent, with two runways having reached overall completion of 100 percent.

Entebbe International Airport is Uganda’s only international airport and handles over 1.9 million passengers per year. Its seizure by China would greatly dent the legacy of the 77-year-old Museveni, who came to power on the back of an armed uprising in 1986 and expose him to election defeat.