Fiat is expected to spend US$1.1bn building car and engine production facilities in Russia under an industry assembly agreement, according to the country’s economic development ministry.

Dmitry Levchenkov, head of the special economic zone and project financing department, said the ministry has already prepared an agreement which is due to be signed with Fiat by early next week.

Under the plan, Fiat will to produce 120,000 cars a year in Nizhny Novgorod. Levchenkov said that the Italian carmaker is currently negotiating loans to implement the project.

He added that foreign automakers’ investments into Russian projects to be made under the industry assembly regime would total over US$5bn in the next three or four years.

These include contracts with a Ford and Sollers JV; Volkswagen; General Motors; and with a consortium including AvtoVAZ, Renault, Nissan, Kamaz, IzhAvto, and United Automobile Group.