Uganda Airlines suffers major financing setback

salim segawa 11:03 - 25 September 2018

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Uganda Airlines is expected to start operations next year

A Canadian company which had committed to fund the acquisition of Uganda Airlines four Bombardier CRJ-900s pulls out of the deal.

Export Development Canada (EDC), an export credit agency, made the decision to reportedly withhold $108 million credit facility over commercial reasons.

Uganda Airlines plans to commence operations between March and April 2019 after placing a firm order for four new CRJ900 regional jets and two A330-800s from Airbus.

EDC had originally planned to extend a low-interest loan to the national flag carrier which has been defunct since 2001.

However, the Canadian export credit agency says it never committed to providing financing.

"EDC did not commit financing support for this transaction. EDC was approached for financing support, but is not participating in the transaction," the spokesperson told Ch-Aviation.

In July, Bombardier Commercial Aircraft announced the signing of a firm order for four new CRJ900 regional jets with Uganda Airlines.

The firm order was valued at approximately $190 million and the government had paid a commitment fee of $400,000.