The World Bank has stalled a $US90 million ($A100.81 million) loan planned to help Uganda strengthen its health care system after the country put in place a harsh anti-gay law.
"We have postponed the project for further review to ensure that the development objectives would not be adversely affected by the enactment of this new law," a spokesman for the global poverty lender said.
The World Bank loan had been slated for approval on Thursday.
The move follows action by Norway and Denmark to freeze or change aid programs for Uganda and blunt criticism from the United States and Sweden after President Yoweri Museveni signed off Monday on one of the world's toughest anti-gay laws.
"Homosexuals are actually mercenaries. They are heterosexual people but because of money they say they are homosexuals," Museveni said at the time.
US Secretary of State John Kerry condemned the new law as akin to anti-Semitic legislation in Nazi Germany and apartheid in South Africa.
Earlier Thursday, Uganda's government spokesman Ofwono Opondo brushed off the criticism.
"The West can keep their 'aid' to Uganda over homos, we shall still develop without it," he said via Twitter.
On Monday, Museveni signed a bill into law which holds that "repeat homosexuals" should be jailed for life, outlaws the promotion of homosexuality and requires people to denounce gays.
