Uganda Airlines: Govt in Talks with Financiers for Shs 1.3 Trillion Needed for Planes

Government has said it is in discussions with potential financiers to avail it with financing worth Shs 1.3 trillion (USD 340m) for the procurement of six aircrafts in line with reviving the national airline, Uganda Airlines.

This was revealed by the Permanent Secretary in the Ministry of Works, Bageya Waiswa on Wednesday during a ceremony to exchange notes for the financing by the Chinese government for infrastructure projects in Uganda.

He said that the Shs 1.3 trillion is required by government to purchase 4 mid range and 2 long range aircrafts from aero manufacturers Bombardier Inc and Airbus respectively.

Plans for the purchase of the airplanes were first revealed in May this year by the Minister of Works and Transport, Eng Monica Ntege Azuba.

At the time, the Minister said that the first four aeroplanes; Bombardiers CRJ900 regional jet liners of 80 to 100 passenger sitting capacity would be purchased by the end of this year. These will be the first to take to the skies, majorly ply regional routes within the East African Community, according to the plan.

Later, government would procure two Airbus A330 Series 800 wide-body twin-engine jet airliners with a 300 passenger sitting capacity.

Read More: Uganda Airlines: Govt to Procure 4 Bombardier Planes by December, Shs 4.4Bn Paid Upfront

Minister Azuba also said at the time that government had already paid a sum of USD 1.2 million (Shs 4.4 billion) upfront in commitment fees split between Bombardier and Airbus.

With an ambitious plan to have the 4 Bombardiers acquired by December this year, government is faced with a financing challenge to secure the full amount to make the purchase for the aircrafts.

Finance Minister, Matia Kasaija told reporters yesterday that discussions are ongoing with potential financiers, but he was hesitant to divulge details saying it was premature.

“We have engaged the potential manufacturers because we did not like the third party arrangement. We have been to Bombardier in Canada to look for two short range aircrafts and Airbus to look for two long range aircrafts,” the Permanent Secretary in the Ministry of Works, Bageya Waiswa said.

“The arrangement was to have the first batch of the mid range aircrafts by December, however, there have been challenges to do with finalization of the funding arrangement because the bulk of this money is coming from loan financing,” he added.

He said the Ministry had submitted a request to the Ministry of Finance to start the process of securing loan financing for the planes.

For his part, Minister Kasaija said; “As far as funding is concerned, we are negotiating. I don’t want to put on the table food that isn’t ready. But definitely we shall tell you”.

He added: “Everything going fine, we should begin seeing Uganda Airlines flying by the end of this calendar year”.

Among other benefits, government believes that the airline will significantly boost Uganda’s trade including agricultural produce and tourism.