- EBRD to finance production of climate-friendly, next generation all-electric Ford Transit Custom commercial vehicles.
- €650 million A/B loan to fund Ford Otosan’s manufacturing expansion in Turkey
- Turkish carmaker’s Kocaeli plant set to become Ford’s electric vehicle hub for Europe
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-tonne commercial vehicles for the European market by arranging a €650 million loan to Ford Otosan, US automaker Ford’s joint venture with Turkey’s Koc Holding.
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. Ford Otosan is Europe’s leading commercial vehicle manufacturer.
The financial package consists of a €175 million loan for the EBRD’s own account and €475 million in debt syndicated to other lenders under the Bank’s A/B loan syndication structure. This is a financing model whereby commercial banks and certain qualifying private-sector lenders participate in an EBRD loan on market terms, with the EBRD remaining the lender of record for the entire loan amount. Participating lenders include Akbank AG, Bank of China, BNP Paribas, Emirates NBD Bank (P.J.S.C.), Green for Growth Fund, HSBC, Industrial and Commercial Bank of China, Mediobanca, MUFG, QNB and Société Générale.
Electric vehicles (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-tonne 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.
Ford Otosan plans to spend TRY 20.5 billion (€ 2 billion equivalent) on next-generation commercial vehicle production through 2026, backed by Turkish state incentives. The company is set to become Ford’s global hub for the production of commercial EVs and create 3,000 new jobs in the coming years.
In addition, the company will work to improve the standards and efficiency of its suppliers by transferring knowledge and advancing their integration into its production processes.
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.”
Haydar Yenigün, Ford Otosan General Manager, 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.”
A long-standing private sector partner of the EBRD, Ford Otosan manufactures, assembles and sells motor vehicles and parts under the Ford brand. It has been Turkey’s top exporter for the past six years.
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.
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