Uganda Eyes Canada, European Agency Loans to Fund Airline Plan

(Bloomberg) -- Uganda will borrow from Canadian and European credit agencies to fund jet acquisitions from Bombardier Inc. and Airbus SE to revive its national airline that’s been defunct for more than two decades.

The East African country will liaise with manufacturers to access credit at concessional rates, Works and Transport Ministry Permanent Secretary Bageya Waiswa said Tuesday in an interview in the capital, Kampala.

Ugandan Airlines will compete with carriers such as Ethiopian Airlines Group, Kenya Airways Plc and RwandAir. Tanzania and Nigeria have also announced plans to reestablish national carriers.

Bombardier said last week Uganda plans to acquire four new CRJ900 jets, while Airbus said it had signed a memorandum of understanding with the state for two A330neo-800 aircraft.

Uganda’s working figure for each Bombardier jet including training its crew is $27.7 million, while that for each Airbus is $108 million, he said.

Uganda will get credit for the Bombardier jets from a Canadian agency, while Airbus purchases will be financed by agencies in France, the U.K. and Germany, Waiswa said.

Delivery of the first CRJ900 jet is expected in January and the rest by the end of April, Works and Transport Minister Monica Ntege Azuba told reporters in Kampala on Tuesday. Long-haul Airbus craft will be ready in 2020, she said.

Uganda National Airlines Co. will operate as Uganda Airlines and will operate its own ground cargo handling unit, the minister said while urging government officials to use the carrier to boost business.

Uganda Airlines started operations in 1977 and was liquidated in 2001 under heavy debt. The government says its revival is aimed at cutting travel costs for Ugandans by improving connectivity and boosting tourism.

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