EU bank green lights €750m in extra clean-car loans

The European Investment Bank (EIB) yesterday approved loans to EU automotive companies worth a total of €750m (£495m), under the condition that the fresh funds are used to design and build low-emission vehicles.

Dutch firm DAF Trucks secured a €150m loan to fund a green research and development project, while Ford was awarded loans worth €400m for the construction and operation of a vehicle and engine plant in Craiova, Romania dedicated to producing low-emission vehicles.

The US auto giant was also awarded a further €200m loan to help fund the German-based research and development activities related to the Romanian plant.

The EIB said that it was also looking at further loans for the automotive sector planned for submission to the board in June and July that should help support green component suppliers.

The loans are the latest in a series of awards from the EIB that have seen it approve €5.2bn in loans since last December for European car and truck makers, €3.5bn of which has been provided under the European Clean Transport Facility, a financing programme set up in 2008 to drive investment in cleaner vehicle technologies.

In April the EIB granted a €400m loan to Nissan to develop and build more fuel-efficient vehicles in the UK and Spain, while £340m was also awarded to Jaguar Land Rover to help it cut vehicle emissions.

The loans are part of a €30bn increase in EIB lending envisaged for 2009-2010 which was approved last year by EU finance ministers. The new loans have a particular emphasis on helping the ailing auto industry, which has been hit heavily by the economic downturn, shift to making lower-emission vehicles.