EBRD reportedly chokes on financing for Polish Volkswagen plant

By bne IntelliNews December 17, 2015

The European Bank for Reconstruction and Development (EBRD) has reportedly halted €250mn of financing for the construction of a Volkswagen factory in the Polish town of Wrzesnia, local press reported on December 17. Unnamed sources claim the move is in connection to the emission's scandal haunting the German carmaker.

The report will stir worries in Visegrad. The auto sector provides a huge chunk of GDP across the region, and Volkswagen units are important manufacturers in each of  Slovakia, the Czech Republic, Hungary and Poland.

While the Polish economy is not nearly as dependent on automaking as its peers, the Volkswagen investment is not small. The factory in Wrzesnia, whose construction has been underway since October 2014, is planned to produce 100,000 Crafter vans each year and employ 3,000. The investment’s value is estimated at over €1bn.

Volkswagen representatives told local media the investment is not in danger and the factory will be completed on time. Production is scheduled to launch in the second half of 2016. Polish analysts suggest to Puls Biznesu that the investment is too important for Volkswagen to halt it, even should the EBRD freeze its financing.  

The German company is still struggling to resolve the emissions cheating scandal that erupted in September. Volkswagen admitted it has falsified emissions tests of its cars, spurring investigations and lawsuits in several countries.

 

 

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