Though reports of Kampala's Entebbe International Airport takeover was denied by both China and Uganda, the tough clauses in the $200 million loan to expand the East African nation's only internationalairport can still spew venom.

The Ugandan authorities and the Chinese trade mission have denied media reports that the airport had been taken over due to a loan default to aChinese lender.

Media reports last week indicated that Entebbe Airport will be taken over by Export-Import (Exim) Bank of China over alleged default on a $200 millionloan, inked in 2015.

The Uganda Civil Aviation Authority (UCAA), however, termed the media reports as untrue in a statement Nov. 27.

"I wish to make it categorically clear that the allegation that Entebbe Airport has been given away for cash is false," UCAA spokesperson Vianney Luggya said in the statement." There isn't an ounce of truth in it,"UCAA Vianney Luggya added.

Luggya claimed that the loan terms provide a grace period of seven years, and 'we are still within that graceperiod.'

To expand transport sector in the country in tandem with regional infrastructural development, Uganda had launched an aggressive 20-year civil aviation master plan which included giving a facelift to its only international airport along the shores of Lake Victoria, around 43km south of Kampala.

China's director-general for African Affairs Wu Pengtermed the media reports as "illogical propaganda".

According to media reports, there are unfavorable provisions in the loan agreement, if not amended, expose Uganda's sovereign assets to attachments and takeover upon arbitration in Beijing. They said that the 2015 deal had waived the immunity onairport assets.

On March 24, 2015, Ugandan parliament approved the loan and the work started to refurbish the airportto handle 150,000 operations a year to convert the landlocked country into a regional hub.

The first person to raise the alarm over the toxic clauses in the deal was former UCAA managing director David Kakuba who warned that failure topay exposes government assets to attachment and takeover by China.
Some 13 clauses in the 2015 deal were found unfriendly and as good as mortgaging the airport. The most troubling was a clause that vested the solepower with Exim Bank to approve withdrawal of funds from the UCAA accounts and the legal power given to China International Economic and Trade Arbitration Commission (CIETAC) in Beijing to resolve disputes.

In the media report it was indicated that UCCA is required to set up an "escrow account to hold all of the authority's revenues "and it has been frozen by China.

"The Authority enjoys the freedom and liberty of spending what is collected (as per the budget)," Luggya said.

Though Uganda dispatched a high-level team to China to roll back the toxic clauses, the delegation, led by former envoy to China Dr Crispus Kiyongam, returned empty handed.

Planning Minister Amos Lugoloobi has already admitted that the loan was poorly negotiated and a dedicated department has been set up to preventthe country from slip into debt.

China's Exim Bank has funded about 85 percent of two major Ugandan power projects -- Karuma and Isimba dams. The Chinese bank also financed and constructed Kampala's $476 million Entebbe Express Highway.

Reports of the alleged Entebbe takeover come amid alarm over the Chinese debt trap diplomacy-giving loans to developing nations under terms that allow takeover of assets in case of a default. However, Peng touched upon the allegation of Chinese debt trap while denying the airport takeover reports.

Which of the Chinese projects in Africa have been confiscated in Africa? None! The hype surrounding the Chinese 'debt trap' in

Africa have no factual basis and is being pushed on malicious grounds," Peng observed.

Many African nations are facing huge debt burdens.The continent's external debt is expected to reach a,record high of over $1trillion in 2022, which could push the external debt to GDP ratio above 40 percent, posting an 18-year high.

At least 18 African countries are re-negotiating their debts while 12 other nations are in talks with China, the top lender to the continent, for restricting anapproximate $ 28 billion loans.