Luxembourg-based European Investment Bank (EIB) is considering a £275 million (Rs 2,100 crore) loan to the Tata group-owned Jaguar Land Rover that will part-fund the group’s proposed £550 million (Rs 4,200 crore) research and development work at reducing the CO2 emission from its future products.
This comes under the category of a supporting loan that the European automotive industry gets to produce vehicles that are environment friendly.
The UK government provides guarantee for loans that EIB gives to the automotive sector for work to reduce emissions. This package, nnounced by the UK government earlier this year, included loans up to £1.3 billion from EIB and another £1 billion from the UK government.
Earlier this month, JLR received the UK government approval for a grant of £27 million (Rs 192 crore) for producing a new eco-friendly car based on Land Rover’s LRX Concept, which was first showcased at the 2008 edition of the Geneva Motor Show.
The EIB said, “The project will contribute to the increase of the promoter’s knowledge and know-how in development of technology for small hybrid powertrains and new lightweight vehicle architecture. The project aims at a very significant reduction in fuel consumption of the promoter’s (JLR’s) future range of vehicles; it is expected to bring about positive environmental results. The completion of this project will assist the promoter to comply with the upcoming European CO2 emission requirements.”
The bank said the support would be focused on the development of new engines designed to meet the CO2 emission targets set by the EU Commission, particularly the development of smaller diesel engines, the development of micro-hybrid and full hybrid downsized drivetrains.
More From This Section
The EIB is also considering a £370 million loan to Japanese car maker Nissan to part-finance a similar project in the company’s facilities in the UK and Spain. Nissan has estimated the total cost of its project at £920 million.
A JLR spokesperson said the likely date of formal approval from EIB was not known yet.