KAMPALA, Nov 29: Uganda is losing its only international airport, Entebbe International Airport, to China for not repaying loans in accordance with a mortgage agreement. The loan agreement had attachment provisions in case of default. It also had clauses barring the Ugandan Government from going for international arbitration in case of any dispute.

Uganda has lately tried to have the clauses changed with China but failed.

In 2015, China's Export-Import Bank (EXIM) had given Uganda $207 million at 2% interest rate. The loan was for the development of the airport and the agreement had a 20-year payback schedule with a seven-year grace period.

African media reported that Entebbe International Airport and other Ugandan assets were agreed to be taken over by Chinese lenders when the debt was in nonpayment mode.

However, hoping to modify the terms of the agreement, Uganda had sent a team to Beijing recently for negotiations, but failed. The Chinese refused to approve any changes to the deal.

According to reports in the local media, the Ugandan Government did not include an international immunity in the agreements in order to facilitate the loans leading to a situation of attachment and takeover by the Chinese now without international arbitration.

Uganda's Finance Minister Matia Kasaija apologised to parliament last week for the "mishandling" of the loan.

According to the Monitor newspaper, the Government wanted to change the need for the Ugandan Civil Aviation Authority to seek approval from the Chinese lender for its plans. They also wanted change in the rule that mandates that any dispute between the parties will have to be resolved by the China International Economic and Trade Arbitration Commission.

Sources in the Ugandan Government deny that the Chinese have taken over the airport.

Entebbe International Airport is the main gateway to Kampala and the rest of Uganda. The airport is located near the town of Entebbe which is situated on the shores of Lake Victoria, the largest lake in Africa. In addition to that, Entebbe airport is located at a distance of 35 kms from Kampala. The airport consists of two terminals which handle domestic and international flights respectively.

In Sri Lanka, the Government had in 2017 agreed to lease a port to China Merchants Port Holdings Co. for 99 years in return for $1.1 billion. China's Belt and Road projects are also facing issues. Many Chinese projects in Pakistan have been stalled.