The Canadian government will lend $160m to Scandinavian airline SAS to help it buy up to eight aircraft from Bombardier.

The agreement was reached between Canada’s export credit agency, Export Development Canada (EDC) and SAS for the sale of the Q400 and CRJ900 aircraft.

The EDC will provide repayable loans to ensure that aircraft production remains strong during the economic downturn, Reuters reports quoting Industry Minister Stockwell Day.

The EDC provides loans to foreign buyers to support purchases of Canadian goods.