Fiat Automobili Srbija,
the majority Fiat owned new automobile venture in Serbia
that is poised to build a new generation of
small-to-mid-size minivans for Fiat at the former
Zastava Auto factory is poised to receive a 500 million
euro loan from the European Investment Bank (EIB).
The EIB loan will
comprise almost half of the 1,086 million euro
investment that the project is set to consume as the
antiquated and now-idled factory in the town of
Kragujevac, which once built Yugo models, is refitted,
brought up to World Class Manufacturing (WCM) standards
and production lines installed to produce new-generation
5- and 7-seater minivans that will replace Fiat's
long-running Idea and recently-discontinued Multipla. As
well as carrying Fiat branding, the new cars will also
be incorporated into the Chrysler Group model range
portfolio and a 200,000 units a year capacity target
from 2012 has been pencilled in.
The half a billion
euro loan was agreed in principle last November by the
EIB; it will be guaranteed by the government of the
Republic of Serbia, Turin-based Fiat Spa and Italian
export credit agency
Servizi Assicurativi del
Commercio Estero Spa (SACE). Today Bloomberg
reported Andreas Beikos, the EIB's chief representative
in Belgrade, as saying: "In the next few weeks we will
finalise negotiations and hopefully by the end of this
quarter, we’ll be in a position to sign the loan
agreement." The loan is being taken out directly by the
Fiat Automobili Srbija entity, which is two-thirds owned
by Fiat and one-third by the Serbian state, and it will
use the funds "entirely for Serbian production", added
Beikos.
According to the EIB's
official loan criteria details: "The project concerns
the promoter’s investments for the modernisation and
expansion of production capacity of the existing Zastava
automotive plant in Kragujevac, which is controlled by
the promoter through a joint-venture with the Republic
of Serbia. The project includes the investments in civil
works, equipment and machinery as well as general
infrastructure at the factory. The EIB adds that the
objective of the project is to "increase the factory
production capacity". The bank adds that this: "will
contribute to increasing FDI [Foreign Direct Investment]
in Serbia, developing the local automotive industry,
supporting the introduction of state-of-the-art
equipment and production organisation, and finally
contributing to the increase of exports and Serbia’s
economic development."
