A significant increase in production at Pirelli's new tyre plant at Slatina, Romania, is anticipated after the company announced it had secured a EUR50m loan from the European Investment Bank (EIB).

The European Union's (EU) largest public financing institution lends at long-term competitive rates, and in a statement the Italian company said the loan would finance more output of car and light commercial vehicle tyres at the plant, which opened in 2005.

In its statement, the bank said the loan "consolidates the relationship between Pirelli and the EIB", which has appreciated the company's "consistent commitment to innovation and increasing competitiveness globally, in research and development as well as in support of industrial growth."

A Pirelli spokesman refused to say how much production would increase following the loan, although past company documents have stressed plans to have an annual manufacturing capacity of about 5m units by December 2009.

Also, an EIB environmental impact assessment said the planned expansion would extend the current factory's size by 90,989 square metres: "With this extension, the capacity of the current production and storage facility will double while keeping the same technical, functional, production, and storage characteristics."

Pirelli plans to invest EUR250m in Romania from 2009-2011, including this loan.