China takes over Uganda’s only international airport over $207m debt

The Export-Import Bank of China, also known as Exim Bank, has taken over the Ugandan Entebbe International Airport and other assets in the country over the failure of the Ugandan government to repay her loan.
This new development emerged despite reports that President Yoweri Museveni had sent a delegation to Beijing for a renegotiation with the Chinese government over toxic clauses that exposed the East African country.
The Museveni-led Ugandan government had on November 17, 2015, signed an agreement with Exim Bank to borrow $207 million at two percent upon disbursement.
The loan had a maturity period of 20 years including a seven-year grace period, but it had now appeared that the transaction signed with the Chinese lenders practically means Uganda “surrendered” its most prominent and only international airport.
The Uganda Civil Aviation Authority (UCAA) revealed some provisions in the Financing Agreement with China that exposed Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon negotiation in Beijing.
Uganda, however, sought to renegotiate the deal but the latest visits and pleas to alter the original terms with Chinese authorities were declined.
According to local media reports, the Ugandan government waived international immunity in the agreement it signed to secure the loans, exposing Entebbe International Airport to take 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.
The 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.