Chinese Govt takes over Uganda Airport over failure to repay $207m loan

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Chinese Govt takes over Uganda Airport over failure to repay $207m loan

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Chinese Govt has taken over Uganda Airport over failure to repay $207m loan

The Export-Import Bank of China, also known as Exim Bank, has taken control of Uganda’s Entebbe International Airport and other assets due to the Ugandan government’s failure to repay a loan.

This was despite reports that President Yoweri Museveni had dispatched a delegation to Beijing to renegotiate toxic clauses that had exposed the East African country.

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The Ugandan government signed an agreement with the Export-Import Bank of China (Exim Bank) in November 2015 to borrow $207 million at a 2% interest rate upon disbursement.

The loan had a 20-year maturity period, plus a seven-year grace period.

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It has now been revealed that the agreement reached with the Chinese lenders effectively means Uganda has “surrendered” its only international airport.

Some provisions in the Financing Agreement with China, according to the Uganda Civil Aviation Authority, expose Entebbe International Airport and other Ugandan assets to being attached and taken over by Chinese lenders the following arbitration in Beijing.

China has also rejected Uganda’s recent requests to renegotiate the loan’s toxic clauses, leaving Ugandan President Yoweri Museveni’s administration in limbo.

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The Ugandan government, according to the Daily Monitor, waived international immunity in the agreement it signed to secure the loans, leaving Entebbe International Airport vulnerable to takeover without international protection.

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Uganda sent a delegation to Beijing in March, desperate to renegotiate the deal’s toxic clauses, but the officials returned empty-handed because China refused to change the terms of the original agreement.

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

Uganda’s only international airport, Entebbe International Airport, serves over 1.9 million passengers annually. Its seizure by China would severely tarnish the 77-year-old Museveni’s legacy, exposing him to election defeat. Museveni came to power in 1986 following an armed uprising.

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