Volvo says discussions are “ongoing” with the Swedish government prior to it formally asking the European Investment Bank (EIB) for a EUR600m (US$770m) loan.
The Swedish automaker – recently bought by Chinese group Zhejiang Geely – is seeking the loan for unspecified environmental projects in the Swedish and Belgian cities of Gothenburg and Gent.
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But it must first secure backing from the Swedish authorities to underwrite the loan before proceeding to the EIB application.
“Volvo has not formally made that application,” a spokesman for the manufacturer in Sweden told just-auto. “We need to first formalise the initial discussions with the Swedish government and Swedish debt office.
“The timetable is these loans are only available before the end of the year, so [they] have to be secured before [then]. We first need to finish initial discussions with the Swedish authorities – they are on-going as we speak.”
The EUR600m loan comprises an additional EUR100m that Volvo has requested in order to cover its plans for a further year until 2013.
Any deal would reinforce the EIB’s status as a prime mover in the European automotive industry after it worked with Opel, Ford and Saab earlier this year.
Last year the bank lent EUR79bn – a rise of 37%
The EIB declined to comment on any potential loan to Volvo.
