Today, the U.K. government announced “a package of measures aimed at freeing up lending of more than £2 billion for the automotive industry.” However, the package does not include any direct government lending to any auto makers.
The elements of the support package, which is open to “projects over £5m from UK based vehicle manufacturers and automotive parts suppliers with an annual turnover of £25m or more,” are as follows:
- Guarantees to unlock loans of up to £1.3 billion in European Investment Bank (EIB) guarantees for investment in lower carbon initiatives, which are intended to “ensure that major new low-carbon investment projects in the UK automotive sector are not abandoned or located outside of the UK because companies are temporarily unable to access sufficient funding from traditional sources of finance”
- Loans or loan guarantees to support of up to £1 billion of lending for lower carbon initiatives for non-EIB backed projects
- Increased funding for training of employees by the Department of Innovation, Universities and Skills under its “Train to Gain” service
In addition, Mervyn Davis, the new Trade and Investment Minister, has been assigned responsibility for developing a plan to improve access to financing to support the auto manufacturers’ finance arms.