China dismisses claims it could take over Ugandan airport if country fails to repay loan

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China has rejected claims it could take over Uganda’s only international airport if the East African country fails to honor a $ 200 million loan for the expansion of the country. installation.

A parliamentary inquiry last month found that China had imposed onerous conditions on the loan, including potential confiscation of the airport in the event of default, sparking public outrage. The Chinese Embassy in Uganda, referring to a local title, said Sunday evening: Developing countries, including Uganda.

“Not a single project in Africa has ever been confiscated by China due to non-payment of Chinese loans.” China has been accused by Western countries of luring poor countries into “debt traps” that they are unable to repay. Cash-strapped borrowers have been pressured to invest in sovereign assets such as airports and seaports to access credit.

The Ugandan loan was secured in 2015 from China’s Exim Bank, one of several lines of credit that Uganda has acquired from China over the past 15 years to finance infrastructure projects, including roads and power plants. The loan agreement was not made public. Lawmaker Joel Ssenyonyi, who chairs the committee that conducted the parliamentary inquiry, said he gives Exim Bank approval powers over the airport’s annual budgets and the terms of the loan allow China to “take over” the airport in case of default, said.

Income from airport operations must be deposited into an escrow account where all withdrawals must be sanctioned by Exim Bank, Ssenyonyi told Reuters on Monday, citing the agreement. The agreement also requires that any dispute arbitration or legal proceedings take place in China under Chinese law, Ssenyonyi said.

“So Uganda is totally excluded, the contract is one-sided,” Ssenyonyi said. A Ugandan attempt this year to renegotiate loan terms was rejected by Exim Bank, Senyonyi said, citing information provided to the committee by Finance Minister Matia Kasaija.

Kasaija declined to comment.

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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