EU Approves Ford Romania 400M Euro Loan

The European Union Commission gave the green light to Ford's Romanian operation attempt to secure an European Investment Bank (EIB) loan for the development of low-CO2 engines and for vehicle production at Ford's site in Craiova. The engines' and vehicles' development will cost Ford around 1 billion dollars.

According to Reuters, Ford is looking to secure a 400 million euro loan from the EIB for at least five years. To get the money, Ford will pay a premium for the guarantees and give Romania high-quality collateral covering the guaranteed amount.

"The Commission can authorize 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," the Commission said in a statement.

"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."

"This collateral would be callable by the Romanian state if it had to pay out any money under the guarantee. The level of the premium paid during the lifetime of the loan is in line with the provisions of the Commission's Temporary Framework."

In addition to the money approved for the European operation, the EIB will also give 200 million euros to the Ford Werke GmbH operation in Germany.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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