- According to the US-based research lab AidData, China’s Exim Bank, a top Chinese lender has imposed “aggressive” repayment terms on a $200 million loan to expand Uganda’s international airport.
- Under the loan payment terms, the Ugandan government is required to channel all revenue from the country’s only international airport into an account held jointly with the lender, according to AidData.
According to the US-based research lab AidData, China’s Exim Bank, a top Chinese lender has imposed “aggressive” repayment terms on a $200 million loan to expand Uganda’s international airport. Under the loan payment terms, the Ugandan government is required to channel all revenue from the country’s only international airport into an account held jointly with the lender, according to AidData. The government is obliged to use part of the revenue to repay the loan each year, before it can invest in public services. The modernisation of the Entebbe airport by State-owned China Communications Construction Company began by repairing runways and building new airport hangers in 2016. The project is expected to be completed this year.
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Chinese banks, the biggest source of infrastructure funding to Africa, have been severely accused of lack of transparency and arm twisting African Governments to repay debts. AidData has accused that the terms of the contract restricted the fiscal autonomy of the government. It has also alleged that the lender is asking not just for revenues from the new projects they are funding, but also from the underlying asset — or the airport — that already exists.
https://trendsnafrica.com/uganda-tanzania-mou-to-remove-non-tariff-barriers/
Chinese creditors — unlike other lenders from developed nations — require governments to deposit some earnings from big infrastructure projects in bank accounts they control to serve as collateral. There was a public hue and cry last year after Ugandan papers reported that China will take control of the airport, if the government defaulted .China dismissed the allegations as baseless.
