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China rejects allegations it may grab Ugandan airport if country defaults on loan

KAMPALA, Nov 29 (Reuters) – China has rejected allegations that it may perhaps seize Uganda’s sole worldwide airport if the east African country fails to services a $200 million loan for the enlargement of the facility.

A parliamentary probe last month concluded that China had imposed onerous problems on the financial loan, which includes possible forfeiture of the airport in case of default, sparking public outrage.

The Chinese embassy in Uganda, referring to a neighborhood headline, said late on Sunday: “The destructive allegation that ‘Uganda surrenders critical property for China cash’ has no factual basis and is sick-intended only to distort the very good relations that China enjoys with creating nations which include Uganda.”

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“Not a single job in Africa has at any time been confiscated by China due to the fact of failing to shell out Chinese loans.”

China has been accused by Western nations of luring weak nations into “credit card debt traps” which they are not able to repay. Dollars-strapped debtors have been pushed to stake sovereign property this kind of as airports and seaports to accessibility credit history.

The Uganda bank loan was secured in 2015 from China’s Exim Bank, just one of the lots of credit history traces Uganda has obtained from China over the past 15 a long time to fund infrastructure initiatives including roads and ability plants.

The mortgage arrangement has not been manufactured community. Lawmaker Joel Ssenyonyi, who chairs the committee that executed the parliamentary probe, stated it presents Exim Bank acceptance powers over the airport’s yearly budgets and that the loan conditions make it possible for China to “get” the airport in situation of default, reported.

Revenues from the airport’s functions are to be deposited in an escrow account exactly where all withdrawals have to be sanctioned by Exim Financial institution, Ssenyonyi instructed Reuters on Monday, citing the agreement.

The arrangement also requires any dispute arbitration or courtroom proceedings to choose put in China under Chinese regulation, Ssenyonyi reported.

“So Uganda is locked out entirely, the agreement is one-sided,” Ssenyonyi claimed.

A Ugandan attempt this calendar year to renegotiate the mortgage terms had been rebuffed by Exim Lender, Senyonyi mentioned, citing disclosures to the committee by the finance minister, Matia Kasaija.

Kasaija declined to comment.

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Reporting by Elias Biryabarema Enhancing by Ayenat Mersie and Ed Osmond

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