In an unusual move, the World Bank postponed a $90 million loan to Uganda over its anti-gay law. But the maternal health project for which the funding was intended is not at risk.
The World Bank is a UN body that provides loans to developing countries. Its goal is the eradication of poverty. Normally, it seeks to stay clear of politics.
It said it was delaying a $90 million (65 million euros) loan to Uganda's Health Ministry, money intended for a project to strengthen the country's health systems, because it wants to ensure that the development objectives of the project would not be adversely affected by the anti-gay law.
The $144 million project focuses on maternal health, newborn care and family planning - public health areas whose grim figures have long attracted the attention of foreign donors.
At least 16 Ugandan women die in childbirth daily, a shocking statistic that made the project critical in this East African country that depends on donors for about 20 percent of its budget.
Announcing the project in 2010, the World Bank noted that without "significant investments" Uganda was "unlikely to achieve the Millennium Development Goal targets related to reducing child mortality and improving maternal mortality."
Sheila Gashishiri, a spokeswoman for the World Bank in Uganda, told DW in an email on Friday the country had made rapid progress on child mortality "but maternal deaths remained high in the country, chiefly due to a lack of obstetric care."
Analysts believe Museveni signed the anti-gay law for reasons of domestic political expediency
Gashishiri told the AP news agency the project would continue despite the postponement. It is set to close in 2015.
Postponement follows aid freezes
In an opinion piece for Friday's Washington Post, Jim Yong Kim, president of the World Bank Group, said they would be having full internal discussion about discrimination and how it would affect projects and gay and lesbian staff members. "My view is that the fight to eliminate all institutionalized discrimination is an urgent task," he wrote.
The Reuters news agency reported that the World Bank has $1.56 billion portfolio of projects in Uganda, which it ranks as one of the world's poorest countries.
The loan postponement follows the announcement by Norway and Denmark that they would hold back donations to Uganda because of the law. Other donors have also threatened to follow suit, and the United States said it was reviewing ties.
The United States is the World Bank's biggest member.
Ugandan commentator Andrew Mwenda, told DW's AfricaLink show that the World Bank had had good relations with Uganda in the past and had taken its decision "under pressure from Western governments rather than from its own internal political dynamics."
Ugandan President Yoweri Museveni, who enacted the anti-gay law on Monday amid Western pressure to veto the bill, may have anticipated the international backlash his government now faces.
Days before he signed the bill, Museveni said he was ready to fight what he called "the homosexual lobby" and urged lawmakers with the ruling party to support him. In signing the law, he said he wanted to stop the west from promoting homosexuality in Africa.
Critics say Museveni, who has held power since 1986 and is up for re-election in 2016, may have calculated that the political benefits of enacting the bill outweighed any losses on the international front.
Homosexuality is criminalized in many parts of Africa. Nigeria passed an anti-gay law in January.
But the Ugandan law - an earlier version of it included the death penalty for some homosexual acts - has become notorious around the world for its severe punishment of gay sex.
The law sets a life term for those convicted of engaging in gay sex. It also creates the offenses of "conspiracy to commit homosexuality" and "aiding and abetting homosexuality," both of which are punishable by seven years behind bars. Those convicted of "promoting homosexuality" face similar punishment.