The European Investment Bank (EIB) is lending EUR 400 million to Ford Romania SA for the expansion and refurbishment of the company’s existing car assembly plant located in Craiova in the South-West of Romania. The Republic of Romania is providing a State guarantee for 80% of the loan under the European Commission’s temporary framework for State aid measures, which gives Member States additional scope to facilitate access to financing in the present economic and financial crisis.
The EIB loan will finance investments in the Craiova Ford plant for the facilities and tooling needed for the production of a new B-segment vehicle with a start of production in the near future and production of the existing model of the light commercial vehicle and a new model scheduled to be launched later. EIB funds will also help to introduce the production of a new small, advanced-technology petrol engine with low fuel consumption. It is envisaged that expanded production capacity will represent an annual output of up to 300 000 vehicles and 300 000 engines.
The EIB has also approved - in principle - a loan of EUR 200 million that will finance research, development and innovation towards the development of vehicles and engines to be produced in the Craiova plant. However, these activities willl be carried out in Ford’s facilities located mainly in Germany.
The vehicles and engines to be manufactured in the Ford Craiova plant will incorporate the latest safety (EURO NCAP 5), environmental (EURO 5 stage) standards and other new technology features and will support Ford in going beyond compliance with the EU regulation concerning CO2 emissions.
EIB Vice-President Matthias Kollatz Ahnen, responsible for lending in Romania, stated: “EIB funds, together with the Romanian State support, provided on favourable terms at a time of difficult market conditions, will both help the Romanian economy to better face the consequences of the current economic crisis and contribute to the production of more environmentally friendly cars. Automotive sector is a priority of the EIB in this respect: in 2009 the Bank loans for this sector amounting to EUR 8.2 billion”.
"We are very pleased concerning the provision of the loan, and want to thank both the European Investment Bank and the Romanian government for their support," said Wolfgang Schneider, Vice President, Governmental and Legal Affairs, Ford of Europe and continued: "The loan will help to assist in the plant's ongoing transformation into a world-class manufacturing facility for vehicles and engines. Our guiding principle is that products built in Craiova deliver what customers expect from us: great products offering environmentally-advanced technologies at affordable prices."
Background:
The mission of the EIB, the European Union bank, is to contribute to the integration, balanced development and economic and social cohesion of the Member States by financing sound investments. Since 1990, the EIB’s lending in Romania has reached approx. EUR 8.2 billion to finance investment projects relevant for strengthening Romania’s competitiveness and increasing the quality of life of the country’s citizens.
The current EIB loans are in line with the Bank’s response to the actual financial and economic crisis that is expressed in the EIB’s clean transport facility for the automotive and other transport industries, their original equipment manufacturers and component suppliers. This facility targets significant CO2 reduction through research, development and innovation expenditure, as well as tangible fixed assets in related infrastructure and production plants.