MUNICH -- Ford of Europe has won loans of 600 million euros to expand its car assembly plant in Craiova, Romania, and boost r&d in Germany.
The European Investment Bank (EIB), the financing arm of the 27-member EU, will provide 400 million euros to help finance investments to start production of a new B-segment vehicle in Craiova in the near future and for a new model scheduled to be launched there later.
Ford bought the former Daewoo manufacturing plant in southwestern Romania in March 2008 and builds the Transit Connect in the plant.
The EIB loan will also help to launch production of a new small, advanced-technology gasoline engine with low fuel consumption at the factory, the EIB said in a statement.
Ford aims to expand production at the Craiova factory to an annual output of up to 300,000 vehicles and 300,000 engines.
Ford of Europe's head of governmental and legal affairs, Wolfgang Schneider, said the loan will help to transform the Craiova plant into a "world-class manufacturing facility for vehicles and engines."
The EIB said it also approved a loan of 200 million euros for research, development and innovation, which will be carried out at Ford facilities in Germany.
The loans are part of the EU's financial measures to help automotive companies gain access to financing during the economic and financial crisis. The Romanian government is providing a state guarantee for 80 percent of the loan.
EIB Vice-President Matthias Kollatz Ahnen said the EIB funds and Romanian state support, which are provided on favorable terms, will help the Romanian economy to better face the consequences of the economic crisis and contribute to the production of more environmentally friendly cars.
He said the automotive industry is a priority of the EIB and last year its loans to the sector amounted to 8.2 billion euros.
