Jaguar Land Rover has received a boost after EU bankers approved a £340 million loan for the firm to invest in greener vehicles.
The European Investment Bank (EIB) gave the go-ahead for the multi-million pound loan to the recession-hit West Midlands firm, which was about £60 million more than had been expected to be announced.
It also approved a £380 million green-car loan to be split between Nissan’s Sunderland plant and its factory in Spain.
The loans, which now need to be guaranteed by the UK Government, are part of a £2.3 billion package for the UK motor industry announced by Business Secretary Lord Mandelson.
The car manufacturers had been waiting anxiously for a decision from the EIB today over funding they say is vital to keep their heads above water.
About £270 million was originally to be earmarked for JLR, linked to research and development in green technology.
Analysts say the money will be a boost for JLR, but the firm will still need some kind of support to keep cashflow going.
In a recent interview with Birmingham Post Editor Marc Reeves, the boss of JLR’s owner Tata, Ratan Tata, said the firm needed £500 million in support from the UK government to avoid the “devastating” effects of the global recession.
Conservative West Midlands MEP Malcolm Harbour welcomed the EIB announcement, but said the EIB decision was just the start of the work necessary to support JLR.
He said: “JLR is a crucial employer in the region and our local economy would be devastated if it is allowed to fall behind its other European competitors.
“This is not a hand-out. It is an investment that will secure jobs and build cleaner cars for the future. It will also give a much-needed boost to suppliers, especially in the West Midlands.
“JLR is being squeezed from both sides. The market and politicians want cleaner cars but manufacturers no longer have the resources to invest in developing them.
“If we want our hard-pressed manufacturers to continue investing in meeting the laudable demands to cut emissions we will have to put our money where our mouths are.
“JLR has impressive research facilities and this loan will enable the many projects ongoing at the company to continue.
But he said the government needed to make sure they were able to use the new funding for green research without having to worry about thie day-to-day survival of the company. He said this would mean some kind of consumer-focused credit support scheme.
“They have told the government normal bank lending conditions aren’t available and asked them for help,” he said. “The government did promise that there would be additional funding on the top of the EIB funding, but that hasn’t materialised yet.”
JLR has plants in Castle Bromwich and Solihull in the West Midlands as well as Halewood on Merseyside.