UGANDA, Entebbe | Real Muloodi News | On Thursday, October 28, 2021, the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) held a meeting at parliament led by Chairperson Hon Joel Ssenyonyi. The meeting aimed to query the loan terms from the expansion and upgrade of Entebbe Airport.
The meeting revealed that the Exim Bank of China could take over Entebbe Airport if the government defaulted on the loan.
On October 8, 2014, the Civil Aviation Authority (CAA) and China Communications Construction Company (CCCC) signed a contract for the expansion and upgrade of Entebbe International Airport (Phase 1).
On March 31, 2015, the government, represented by the finance ministry, signed a loan agreement with Exim Bank of China for the principal amount not exceeding Renminbi 1.26 billion (about US$200m) towards the project. The interest rate was 2% per annum, with a maturity period of 20 years, including a seven-year grace period.
In 2015, the State Minister of Finance, Mr David Bahati, assured legislators they would seriously monitor the funds to ensure they are used appropriately and as planned.
When asked about the troubling loan agreement between Entebbe airport and China Exim Bank, Finance Minister Matia Kasaija could not convincingly explain it.
However, he admitted that the contract has loopholes.
“The agreement has a lot of troubling clauses. Entebbe Airport ownership may shift to China. The Finance Ministry and Civil Aviation Authority seem to have executed a dangerous mortgage deal with China under a poorly crafted loan agreement,” said Muwada Nkunyingi, the Shadow Foreign Affairs minister.
“It is right to understand how China has done this. But then, how has Uganda always done its loan agreements? This would have provided a meeting point between the two parties,” said Joel Ssenyonyi.
“We want to know what interests of Uganda were put forward to the China Exim Bank while negotiating this loan,” commented Hon Jessica Ababiku (NRM, Adjumani District).
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