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Nov 13, 2009 14:59 EEST
November 13 (SeeNews) - The European Commission said on Friday it has authorized a planned 80% state guarantee by Romania to enable Ford Romania, a unit of U.S. Ford Motor Company, to access a 400 million euro ($595 million) loan from the European Investment Bank (EIB).
"The Commission can authorise this state guarantee, which should contribute to Ford's trans-European investment project for environmentally-friendly cars without giving rise to undue distortions of competition,” Competition EU Commissioner Neelie Kroes said in a statement.
You can download the 2023 Automotive industry in Southeast Europe report here
The loan will co-finance the development project of a low-CO2 engine and subsequent vehicle production at Ford Romania's plant in Craiova, southern Romania, the Commission said.
Ford Romania is planning to use the EIB funds for its project, worth over 1.0 billion euro, at the Craiova plant, which is part of a joint European venture to develop low-CO2 emission engines and cars. The EIB lends a total of 600 million euro to Ford Europe for the development project, out of which 200 million euro goes to Ford Werke GmbH in Germany.
The loans and the corresponding guarantees will be provided for five years, for the period 2009-2014 with a maturity of seven years. Ford Romania will pay a premium for the guarantees and provide the Romanian Government with high-quality collateral covering the guaranteed amount, the Commission said.
Ford Motor Company entered the Romanian market in March last year, when it wrapped up the acquisition of a 72.4% stake in Romania's Automobile Craiova, the sole owner of car maker and distributor Daewoo Automobile Romania.
($ = 0.6718 euro)
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