EBRD supports Turkey’s Tofaş to build two new models with 200 mln-euro loan
ISTANBULThe European Bank for Reconstruction and Development (EBRD) is supporting car development in Turkey with a 200 million euros syndicated loan to leading Turkish automaker Tofaş, it said in a written statement Oct. 22.
A joint venture between Italy’s Fiat Chrysler FCA and Turkey’s Koç Holding, Tofaș will use the EBRD financing to build two new models of passenger cars – a hatchback and a station wagon – both targeted for export.
The loan, of which 100 million euros has been syndicated to HSBC Bank PLC and Bank of America Merrill Lynch, will finance research and development investments which include the engineering, design and prototype development of the new models, said the statement.
The process will be led by Tofaș’s own research and development center in the northwestern Turkish province of Bursa and will involve Turkish universities and the company’s suppliers sharing the latest knowledge and cutting-edge technologies across the automotive industry.
Tofaş has been investing in research and development since the early 1990s and today is a strategic R&D resource for the FCA Group. It employs 600 highly qualified staff and is the FCA’s second largest hub located in the Europe, Middle East and Africa (EMEA) region, according to the statement.
The EBRD financing will also cover fixed asset investments for the production of approximately 700,000 vehicles from 2016 to 2022 at the company’s plant in Bursa. The loan will also finance investments outsourced to suppliers, creating stronger ties across the chain.
In addition, the bank will help Tofaș provide more employment opportunities for young people through expanded vocational training and closer partnerships with schools. They also aim to bring more women into the traditionally male-dominated automotive sector by supporting best practices in recruitment, career management and workplace practices.
In 2014 Turkey became the leading recipient country of the EBRD, with new investments worth 1.4 billion euros.
To date the EBRD has invested over 6 billion euros in Turkey through close to 160 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilized over 12 billion euros for these ventures from other sources of financing.