EBRD, Ford Otosan charge ahead with big EV lending
The European Bank for Reconstruction and Development (EBRD) is supporting the production of a range of next generation all-electric and plug-in hybrid variants of one-ton commercial vehicles for the European market by arranging a 650 million-euro loan to Ford Otosan, US automaker Ford’s joint venture with Turkey’s Koç Holding, according to a statement from the bank on July 14.
The financing, shared by the EBRD and commercial lenders, is part of the bank’s drive to fund the green transition and supports Ford’s aim of leading the electrification of the automotive industry for a climate-friendly, more sustainable future, said the statement.
Ford Otosan is Europe’s leading commercial vehicle manufacturer. It announced in March that it will open the first integrated electric vehicle (EV) factory of Turkey in the industrial Kocaeli province in 2022 to manufacture new-generation commercial vehicles and batteries. The investment worth 2 billion euros ($2.4 billion) is expected to create 3,000 direct and 15,000 indirect jobs at the first phase of the factory, according to the firm.
The financial package consists of a 175 million-euro loan for the EBRD’s own account and 475 million euros in debt syndicated to other lenders under the bank’s A/B loan syndication structure.
Participating lenders include Akbank AG, Bank of China, BNP Paribas, Emirates NBD Bank, Green for Growth Fund, HSBC, Industrial and Commercial Bank of China, Mediobanca, MUFG, QNB and Société Générale.
EVs are seen as key to the future of transport, as more and more governments move to decarbonise the industry to speed up reductions in greenhouse gas emissions and combat climate change.
The new one-ton Ford Transit Custom will be launched in the first half of 2023. The battery-powered EVs and plug-in hybrid variants will substantially reduce harmful emissions, promoting a more climate-friendly transport option.
Arvid Tuerkner, EBRD Managing Director for Turkey, said: “Electric vehicles are a promising step towards lowering greenhouse gas emissions from the transport sector and I am pleased that the EBRD is able to support Turkey in becoming a European hub for commercial EV production, bringing in know-how, creating jobs and promoting a low-carbon economy. I am also delighted that we were able to attract sizeable financing from commercial lenders, reinforcing our commitment to mobilising private investment for global priorities.”
Ford Otosan CEO Haydar Yenigün said: “As Ford Otosan, the leading commercial vehicle manufacturer in Europe, we are proud to sign one of the biggest financing agreements in the automotive sector with the EBRD within the scope of our largest automotive investment in Turkey, as previously announced. With this strategic investment, as the country’s leading exporter, not only of vehicles but also engineering and technology for many years, we will have the opportunity to work on advanced technologies that will contribute to the national economy and produce more sustainable products for a greener world.”
Turkey exported more than 900,000 vehicles to 180 countries across five continents last year and the automotive industry’s exports in 2020 exceeded $25 billion amid the COVID-19 pandemic.
Ford Otosan generates 25 percent of Turkey’s total automotive production and exports, and it employs 12,500 people currently.
Previously, the firm produced Turkey’s first electric commercial vehicle - Custom PHEV.
The EBRD is a leading institutional investor in Turkey and, to date, has invested more than €13 billion in the country through 341 projects, with 96 per cent of those in the private sector.