Fiat and its Serbian joint venture partners are to receive a loan of up to EUR500m (US$685m) from the European Investment Bank (EIB).

The bank's board of directors said the loan would support the investment programme of Fiat and Srbija Automobili Doo, a joint venture between the Italian manufacturer and the Belgrade government.

However, the deal has still to be formally signed as it appears more than one cash agreement will need to be inked. 

"The timing of the signature will depend on the Fiat Group investment needs," said the EIB in a statement emailed to just-auto. It is likely that more than one finance contract will be signed, as this type of investment needs some time to be implemented."
The EIB, together with the Serbian government, is also mulling what it terms "financial instruments" to support smaller enterprises which will invest alongside Fiat.

Last October, Serbian government officials announced Fiat would add some 1,433 workers to the existing 1,000 employees as it looked to begin five and seven door vehicle production.

Fiat Automobili Srbija would benefit from around a EUR944m spend by its parent company at the Zastava plant at Kragujevac, 140km south east of Belgrade.

Serbia was the beneficiary of an EIB loan in 2009, with EUR384m to finance the construction of a 75km section of the E-75 motorway on the Pan-European Corridor X between Grabovnica and Levosoje.

The operation was the EIB's seventh project in the roads sector in Serbia since 2000 and was also the largest single loan provided to date by the EIB in the Western Balkans.

The Grabovnica-Levosoje motorway section forms part of the wider Pan-European Corridor X investment programme, which also includes section E-80 towards Bulgaria, that the EIB is also considering financing.