The European Investment Bank on Tuesday approved €866 million ($1.2 billion) of loans to EU carmakers, including Nissan and Jaguar, to make cleaner cars as part of a bigger package to help the sector, the bank said.
The money is part of a €7 billion lending package to the ailing European automotive industry that the bank, the European Union’s lending arm, expects to approve in the first half of this year.
It had already announced €3.6 billion in loans and more is to come. The bank has set a limit on loan per carmaker at €400 million.
The EIB said that Nissan’s European operations would receive €400 million to develop and build more fuel-efficient vehicles in Britain and Spain.
Jaguar Land Rover will get £340 million or €366 million to 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 said.
Automakers across Europe have been feeling the pain as the economic downturn, sparked by the crisis in the banking and finance sector, curbed consumer spending on big-ticket items.
The EIB lent money to German, Italian, French and Swedish automakers in March. Swedish truck makers Volvo and Scania received €400 million each and the Volvo car maker, owned by Ford, received €200 million.
The bank lent €400 million each to France’s PSA Peugeot-Citroen and Renault, Italy’s Fiat and Germany’s BMW and Daimler.
The loans are part of a €30 billion increase in EIB lending envisaged for 2009-2010 that was approved last year by EU finance ministers and leaders, who put special emphasis on more credit to the auto industry. (Reuters)