I decided to move Entity Connection String from app.config to code. However after setting it up like this:
Entity Connection String
app.config
public static string
After reading this answers article and this blog I changed:
entity.Metadata = @"res://*/Data.System.csdl|res://*/Data.System.ssdl|res://*/Data.System.msl";
To:
entity.Metadata = "res://*/";
And it works :-)