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Kampala, Uganda — Ugandan officials are rejecting reports that China could take control of the country’s only international airport because of a failure to honor a loan agreement. China’s embassy in Uganda also dismissed the report. But analysts note the loan deal could become a problem if Uganda ever has trouble paying it back.

Local media reports had indicated that Uganda risked losing its only international airport to China over a $200 million loan to expand the facility.

According to documents shared with local media, China rejected Uganda’s request to re-negotiate some clauses in the 2015 loan deal.

This included a clause that required Uganda’s civil aviation authority to set up an escrow account to hold all of its revenues. Under the clause, the revenues in this account cannot be spent by the aviation authority without approval from Beijing.

Vianney Luggya, the Uganda Civil Aviation Authority spokesperson, told VOA that the Ugandan government has no intention of defaulting on loan repayments to China.

“It is not true that Uganda is going to lose Entebbe International Airport in any way whatsoever. This is not the first time that this allegation is coming up. Uganda is not about to default in honoring the loan obligation. We are still within a grace period of seven years and during that period we have been paying interest,” said Luggya.

The loan agreement also gives China’s Export-Import Bank oversight over monthly operating budgets for the airport.The bank is also authorized to inspect both the Aviation Authority and Ugandan government books of accounts, which some see as eroding the sovereignty of the state.

Read the original article on VOA.