The European Investment Bank (EIB) is planning to inject 350m Euro (£240m) into a UK-based car manufacturer – believed to be Ford – to fund major advances in engine technology.
The proposed loan, which is under appraisal, would help the car maker to develop next-generation engines with significantly improved performance, fuel economy and emissions standards. A spokesman for the bank refused to name the recipient, as such transactions are covered by a confidentiality agreement, but documents say the money would be spent over the period 2004 to 2008.
‘What we are possibly going to finance is not building new factories but R&D on drivetrains for a new generation of motors that meet European Union environmental standards,’ said the EIB spokesman.
Since the last Fiesta rolled off the production line at Dagenham in 2002 the plant has become the Dagenham Diesel Centre. The factory produces the 2.7-litre V6 diesel engine, featured on the Jaguar S-Type, and has the capacity to build more.
Ford’s petrol engine plant at Bridgend currently produces 600-700,000 engines per year, with the intention to increase to one million by 2010. Ford said it was unable to comment.
The project description released by the bank said the funding would cover a number of ‘basic RDI (research, development and innovative downstream investment) activities, engineering for design, engineering for manufacturing, facilities and tooling, and industrial development and implementation’.
The document added that the loan would help maintain employment in an industry that is shedding jobs, being spent on a plant in a relatively depressed region.
The EIB is the EU’s largest public investment institution, and finances on average around 30-33 per cent of any project, up to a maximum of 50 per cent, meaning the investment as a whole could involve between 700m Euros (£480m) and around 1bn Euros (£690m).