Volvo Car has signed a EUR198m (US$261 million) loan deal to fund production at its plant in Ghent, Belgium.

The five-year loan, made by ING Belgium, is guaranteed by the Flemish regional government, according to a Reuters report.

"The loan secures investments and jobs in Ghent and provides Volvo Car Corporation with funding stability for car projects ... in our Belgian factory," chief executive Stefan Jacoby said.

The conditions of the loan were in accordance with the European Commission's Temporary Framework which allows government to provide aid to companies when credit markets are tight, Volvo said.