EUR 866m European Investment Bank loans for cleaner cars - briefing

07 April 2009
by eub2 -- last modified 07 April 2009

The European Investment Bank’s Board of Directors has approved loans to European-based car makers worth a total of EUR 866m to help design and build cleaner cars with lower CO2 emissions.

The sum adds to the EUR 3.6 bn in loans approved since last December for European car and truck makers. Further loans planned for submission to the Board in May and June would reach an even wider range of beneficiaries, including component suppliers, and bring to tal approved lending to the motor industry to more than EUR 7 bn since last December, when the EIB launched a support package to aid Europe’s economic recovery from the current crisis.

Some 63 per cent of the lending approved today for the motor industry will be provided under the EIB's European Clean Transport Facility (ECTF). The Facility, part of the EIB's wider response under the European Economic Recovery Package, targets significant cuts in vehicles' CO2 emissions through research, development and innovation, as well as the production of cleaner and more fuel-efficient cars and other transport. The balance, which is also aimed at safer, smaller and more fuel-efficient cars, will be provided under the EIB's convergence objective to support Europe’s less affluent regions, and its external lending mandate for Asia and Latin America.

The loans include EUR 400m to Nissan's European operations to develop and build more fuel-efficient vehicles in the United Kingdom and Spain, and GBP 340m (EUR 366m) to Jaguar Land Rover to help cut vehicle emissions. A loan was also approved for a Volkswagen plant in India, which will produce small cars that meet tougher emissions requirements ahead of their introduction in major Indian cities from 2010.

The EIB has signed loans with BMW, Renault and Volvo Trucks since they were approved at the last Board meeting on 12 March.

Under the broad economic recovery package announced in December, the EIB is raising its total lending by EUR 15 bn per year for both 2009 and 2010 compared to previous years. The increase is directed at three main areas: helping small and medium-sized enterprises (SMEs) and mid-cap firms, supporting Europe’s convergence regions and contributing to the fight against climate change (including the ECTF). The EIB is already well on its way to achieving the objectives set by EU member states.

Background note:

The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives.

Source: European Investment Bank