Export Development Canada (EDC) has reportedly withheld a USD108 million credit facility to Uganda Airlines (Entebbe/Kampala), casting doubt over the start-up carrier's plan to add four CRJ-900s for its regional services, Mulengera Media has written.

"We had a high-level meeting with the Finance Ministry technocrats and apologetically communicated to them we won't be funding the procurement of four Bombardier aircraft meant for Uganda Airlines' regional passenger flights," a Canadian diplomatic source told the newspaper.

EDC, an export credit agency similar to US Ex-Im Bank, originally planned to extend a low-interest loan to the nascent flag carrier in Uganda to facilitate its acquisition of the four CRJ-900s. The aircraft are due to deliver in 2019, ahead of the delivery of two A330-800s from Airbus in 2020.

In a statement to ch-aviation, EDC said it never firmly 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 said.

No official explanation was given for the withholding of the export financing. The Ugandan media link the decision by the Canadian bank to Uganda's poor human rights record and a recent arrest and the alleged torture of an opposition MP Bobi Wine.

EDC did not respond to ch-aviation's request for comment.

Uganda Airlines plans to commence operations between March and April 2019.