Russia’s VEB to Grant RUB39 Billion Loan to Ford-Sollers JV

MOSCOW, Russia - Vnesheconombank (VEB), Russia’s national bank for development and foreign economic affairs, will open a RUB39 billion (approx. €960 million / $1.4 billion) credit line for a joint venture between Ford and local car maker Sollers, Vladimir Dmitriyev, the head of VEB said on Friday.

The credit line with a 10-year repayment period will be opened at an interest rate equaling the central bank refinancing rate, currently at 8%, plus 2%. Total investment in the project amounts to RUB75 billion, Ford and Sollers will invest RUB18 billion each in the venture, Dmitriyev said.

Sollers announced plans to set up a production and distribution company with Ford in February having broken off joint venture talks with Fiat for undisclosed reasons.

The venture will include production in the Leningrad region, where Ford already has a factory, in Naberezhniye Chelny and in Yelabuga in the Republic of Tatarstan, where Sollers also operates assembly plants.

The JV will commence operations by the end of 2011, with an annual production capacity of 350,000 Ford passenger cars and LCVs.