Car makers get £783m of loans

The European Investment Bank has approved loans worth 866 million euros (£783 million) to European car manufacturers to help design and build cleaner cars .

The sum adds to the 3.6 billion euros (£3.3 billion) given in loans since last December for European car and truck makers.

The loans include 400 million euros (£362 million) to Nissan’s European operations to develop and build more fuel-efficient vehicles in the United Kingdom and Spain, and 366 million euros (£340 million) to Jaguar Land Rover to help cut vehicle emissions.

"This loan will support Jaguar Land Rover's significant investments in environmental technologies that are crucial for the future – part of a total commitment by the business of over £800 million," said a spokesman for JLR.

JLR warned that access to the money would not be immediate, however. "Access to the funding is subject to a number of due diligence and commercial loan criteria, including partial backing by the UK's government guarantee scheme, that we will be working to complete as quickly as possible."

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

Around 63 per cent - £493 million - of the lending approved today will be provided under the EIB’s European Clean Transport Facility (ECTF). This 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.

Further loan applications will be considered by the EIB in May and June, and are expected to take lending up to seven billion euros (£6.3 billion) since December for the car industry. Upcoming loan applications include those from car industry component suppliers.