China Has Not Taken Over Uganda International Airport – Officials

The Governments of Uganda and Beijing have denied media reports alleging that Entebbe International Airport has been handed over to the Chinese government over its inability to repay a $207m loan secured from Export-Import Bank of China in 2015.

The Uganda Civil Aviation Authority (UCAA) was said to have reportedly used the airport and other assets as collateral for such loans.

But in a tweet on Monday, Uganda, through the UCAA, stated that the report is false.

It however confirmed that there is a loan agreement with China, adding that the Government cannot give away a national asset like an international airport.

Without given details of what the loan arrangements are , Uganda stated that the period of the loan terms runs for seven years and it has not defaulted.

“The arrangement is only similar to what happens when one gets a salary loan or any other loan for that matter, and the bank requests that the salary is channeled through their bank. It does not mean that the lending bank takes over the borrower’s salary.

“The loan terms provide a grace period of 7 years, and we are still within that grace period during which only interest is paid, and government has not defaulted on those obligations,” the UCAA stated.

In its own reaction, the Chinese Embassy in Uganda explained that the airport under reference was a US$200 million preferential loan voluntarily entered into by the benefiting country.

China made it clear the loan “is guaranteed by Uganda’s sovereign credit, not by anything else.”

The embassy said the reports stating that “Uganda Surrenders Key Assets for China Cash” should not be believed because it has been improving Africa’s corporate development.

“Not a single project in Africa has ever been confiscated by China because of failing to pay Chinese loans.

“The two parties of China Exim Bank and the Ugandan side signed the loan agreement in March 2015 and began construction in May 2016. Despite the negative impact of the COVID-19 pandemic, China Communications Construction Company Ltd., the contractor, has managed to catch up with the schedule of the project with the firm support and solidarity from Ugandan Government, especially Uganda’s Ministry of Foreign Affairs, Ministry of Works and Transport, Civil Aviation Administration and other relevant Ministries, Departments and Agencies. Now the project has progressed smoothly to 75.1%, and is expected to be completed and delivered in December 2022.

“All loan agreements, including that of the Entebbe Airport Expansion and Upgrading Project, are voluntarily signed by both parties through dialogue and negotiation on equal footing without any hidden terms or political conditions attached. Terms of the loan agreement for Entebbe Airport Expansion and Upgrading Project are in full compliance with the prevailing conventions and practices in the international financial market,” the embassy said in a statement on Sunday.

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