Debt Office concludes a loan agreement with Volvo Aero

News 14 April 2011

The Debt Office has signed an agreement with Volvo Aero Corporation concerning a government royalty loan. This loan will co-finance Volvo Aero’s R&D costs for certain components of the Trent XWB aircraft motor supplied by Rolls Royce.

The aircraft motor will power the forthcoming A350 XWB aircraft from Airbus.

The Government assigned the Debt Office to conduct negotiations with Volvo Aero about the central government’s financing involvement in April 2008. After the Debt Office and Volvo Aero had negotiated a proposed loan agreement, this was sent to the European Commission for approval in November 2008.

The European Commission made a decision on 23 February this year to approve a loan for SEK 120 million.

The royalty loan means that the company will pay the central government a royalty on future sales proceeds. This means that the repayment entirely depends on how many Trent XWB aircraft engines are sold.

For further information please contact:

Unni Jerndal, Head of Communications, phone +46 8 613 45 96