VOLVO TRUCKS CLEAN TRANSPORT RDI

Promoter – Financial Intermediary

AB VOLVO

Location

• Sweden
• France

Description

The project concerns the promoter's investments in the period 2021-2024 for the development of electric vehicle technologies, active and passive safety and autonomous driving technologies, as well as non-powertrain related energy efficiency improvements.

Additionality and Impact

The project is of high strategic importance for Volvo AB. By supporting this project, the Bank will help the promoter in developing electrification technologies of commercial vehicles where this is practically at its nascence, as well safety technologies for vehicle operators as well as vulnerable road users, and overall the development of a more sustainable and efficient European transport system. 

The project contributes to the Bank's Innovation, Digital and Human Capital policy objective. The project components concerning RDI on electrification technologies will also contribute to the EIB Climate Action and Environmental Sustainability (climate action mitigation) policy objective.

The promoter's investments address the market failures and gaps associated with (i) imperfect competition and incomplete markets for very innovative and still not close to viable market stage electrification, vehicle automation and connectivity technologies, and those addressed by (ii) projects with positive knowledge, environmental and safety externalities generation.

In addition to the benefits described above, the project will have a positive effect in terms of knowledge generation and diffusion, as well as on employment, through both the increase of highly skilled R&D jobs, and the development and re-skilling of the company's R&D resources. 

The project will be managed and implemented by a promoter with very strong capabilities and expertise. It is fully aligned with the developments of technology, market and societal trends and fully supports the promoter's decarbonisation strategy and vision.

The Banks technical contribution and advice for the project is explained by (i) the guidance provided to align the project scope definition with the policy objectives at project origination and during the due diligence; and (ii) the monitoring requirements, given the associated sector risk.

The Bank's contribution to the project is supported by a combination of its advantageous terms, flexible availability and utilisation of the loan, as well as helping crowd-in other financiers, thereby facilitating the project's financing and full implementation.

Objectives

The project will help strengthening the company's technology competence and will contribute to the ongoing transformation of the heavy-duty vehicle sector. In particular, it concerns vehicle electrification for the decarbonisation of the transport system, autonomous driving for safe and connected mobility, as well as the development of a safer and more sustainable European transport system.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

EUR 500 million

Total cost (Approximate amount)

EUR 1234 million

Environmental aspects

The project concerns investments in research and development that are expected to be carried out in already existing and authorised facilities. The project does not fall under any of Annexes of the Environmental Impact Assessment (EIA) Directive 2014/52/EU amending Directive 2011/92/EU and therefore it does not require screening or EIA Report. Further details will be analysed during the due diligence. The results of this R&D project are expected to contribute to the development of a more sustainable European transport system.

Procurement

The promoter has been assessed by the EIB as being a private company not operating in the utilities sector and not having a status of a contracting entity, thus not being subject to EU rules on public procurement.

Status

Signed - 19/10/2022