The European Investment Bank (EIB) has approved a EUR400m loan to Ford Romania to help it expand and modernise its Craiova assembly plant, tooling up for a small car model.
Ford is already assembling Transit Connect vans at Craiova, and production is expected to increase this year thanks to the expansion.
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The loan – 80% guaranteed by the Romanian government – will also help Ford build new small petrol engines with low fuel consumption at Craiova. The EIB said once the expansion is completed, annual production capacity should reach 300,000 vehicles and 300,000 engines.
The bank has also approved a EUR200m loan for research, development and innovation for Craiova-produced vehicles and engines, although this work will be undertaken elsewhere – mainly at Ford centres in Germany.
Ford of Europe vice president Wolfgang Schneider said: “The loan will help to assist in the plant’s ongoing transformation into a world-class manufacturing facility for vehicles and engines.”
He said Craiova would produce “great products offering environmentally-advanced technologies at affordable prices.”
EIB vice-president Matthias Kollatz Ahnen said the loan was “provided on favourable terms at a time of difficult market conditions.”
The financing was expected, given the European Commission’s approval last November of Romania’s loan guarantee. It is the latest of a series of EIB auto sector loans fuelled by the recession: last year the bank lent EUR8.2 bn to European automakers.
The new small car model has not been identified although Ford has indicated it would not be a Fiesta or Ka.
