Uganda loses its only international airport to China due to debt default
China has rejected a request to renegotiate “toxic clauses” in a loan worth more than $200 million to expand the airport. The Ugandan president sent a delegation to Beijing to renegotiate, but the attempt was unsuccessful.
Uganda has lost its only international airport, Entebbe International Airport, to China due to a debt default, African media reported and according to the publication. Media India Today.
Lenders in China have rejected a request to renegotiate the “toxic clauses” of the more than $200 million loan approved six years ago to expand Entebbe International Airport.
In 2015, the Export-Import Bank of China (EXIM) loaned Uganda $207 million at 2% at the time of disbursement. News X reported that the loan, earmarked for the expansion of Entebbe airport, came with a maturity period of 20 years, including a grace period of seven years.
But according to international media reports, the Ugandan government has waived the international immunity clause for the loan guarantee, after which the Chinese lender can reclaim Entebbe International Airport without any international arbitration.
Reportedly, a statement from the Uganda Civil Aviation Authority (UCAA) indicated that some provisions of the financing agreement with China subject Entebbe International Airport and other Ugandan assets to be seized and seized by Chinese lenders after arbitration in Beijing.
Uganda attempted to renegotiate the “toxic” terms of the agreement. President Yoweri Museveni sent a delegation to Beijing to renegotiate with the Chinese government, but Beijing has repeatedly rejected attempts to renegotiate. A team led by former envoy to China, Dr Crispus Kiunga, was told publicly in 2019 that there would be no amendment to the loan agreement.
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Last week, Ugandan Finance Minister Mattia Kasaiga apologized to parliament for “mismanaging” the multi-million dollar loan.
Uganda is the last in the list of African countries that got commercial loans for infrastructure development, but later found out that they could not keep the payment.
Information retrieved from indiatoday.in And swarajyamag.com
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