By Nicholas Bariyo

KAMPALA Uganda--Sweden has resumed financial aid to Uganda, less than six months after the Scandinavian country suspended its support following the enactment of a severe anti gay law.

The Swedish embassy in Kampala said Monday that Sweden would extend around $200 million in development support to Uganda over the next five years, to improve the country's health care, including sexual and reproductive health and strengthen the "respect of human rights."

The development is a huge relief for Uganda, which depends on aid to provide healthcare at nearly all state-run hospitals across the country. The move comes just a few weeks after Uganda's foreign ministry said that donors who withheld millions of aid over the anti-gay law had "misinterpreted" it.

"Sweden wants to help create better conditions in Uganda for sustainable economic growth and development... Sweden continues to support human rights and freedom from violence," Sweden's Minister for International Development Cooperation, Hillevi Engstrom, said.

Ugandan President Yoweri Museveni in February signed into law the highly controversial anti gay bill, which imposes jail terms of up to life in prison for some homosexual acts, drawing the ire of international donors.

Sweden was among the first donor nations to freeze aid to Uganda, saying that the law threatened its "economic cooperation" with Kampala. Soon after other donors including the World Bank, Norway, Denmark and the Netherlands responded by suspending or redirecting up to $120 million in aid.

Days after signing the law, the Ugandan shilling suffered its biggest drop against the dollar in two years and the currency has since dropped by nearly 5%.

Writeto Nicholas Bariyo at nicholas.bariyo@dowjones.com

(END) Dow Jones Newswires

July 28, 2014 03:56 ET (07:56 GMT)

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