US Carmaker Ford To Invest EUR1.2B In Romanian Plant, May Get EUR600M From EIB

"The loan that Ford asked from EIB totals EUR600 million, out of which EUR400 million are for direct investments at Craiova, and the rest of EUR200 million are to be invested in research and development in Germany, exclusively for auto projects in Romania," Nadia Crisan, Ford Romania representative, stated Tuesday.

 

Crisan stated that Ford Europe’s investments in Craiova plant, stipulated in the privatization contract, total EUR675 million, adding the sum also includes the EUR400 million to be contracted from EIB.

 

Romanian state will guarantee 80% of the EUR400 million that Ford will invest directly in Romania, according to Ford representative.

 

Last year in March, Ford paid EUR57 million for a 72.4% stake in southern Romania's Automobile Craiova assembly plant. It pledged to further invest EUR675 million to upgrade the Craiova car plant.

 

EIB is analyzing a EUR600 million loan that will be used for the construction and operation of a vehicle and engine plant in Craiova, the technical rehabilitation of the existing plant, as well as the RDI related activities for the plant carried out in Germany, according to an anouncement posted on the bank's website.

 

"The project will contribute to the development of the region’s automotive industry, enhance its competitiveness and will support the development of the local cluster of suppliers. It will contribute to stabilize the employment of the current 3,900 employees and create substantial new direct employment at the site,” according to the EIB announcement.

 

Romanian Finance Ministry already stated it will support European Investment Bank’s involvement in sustaining the country’s auto industry, according to the decision taken by the EU authorities.

 

This year, Ford will start producing the light commercial vehicle Transit Connect at Cariova plant, followed by a new small class vehicle in 2009. In 2011 or 2012, Ford will start the production of a medium class commercial vehicle in Romania.