The EIB backs Fagor Ederlan’s innovation strategy with 27 million euros

The European Investment Bank (EIB) and Fagor Ederlan Group, a cooperative that forms part of the MONDRAGON corporation, have entered into a 27-million-euro financing agreement aimed at strengthening the group’s strategic lines of innovation, digital transformation and sustainability. Based in Gipuzkoa, Fagor Ederlan is a global benchmark in the manufacture of automotive components, specialising in suspension, braking, powertrain and structural components.

The loan will finance the cooperative’s strategic investments to be implemented during the 2021-2024 period in its various facilities in the Basque Country. The EIB-financed investments will enable Fagor Ederlan to strengthen its long-term competitiveness and respond to the significant challenges in the automotive industry arising from the changing paradigm in mobility; sustainable, electric, shared, connected and autonomous.

One of the biggest challenges for the sector is the commitment of the entire value chain to this new model of mobility and industry. The sector is committed to the global goals of decarbonisation and neutrality in which electrification and innovation to achieve more efficient processes and technologies and with lower carbon footprint constitute the main lines of action.

To do so, a significant part of the investment will focus on development of machinery for the production of increasingly lighter components with lower carbon footprints as well as development of new components and systems for electric vehicles. The agreement will also contribute to installation of more sustainable advanced manufacturing technologies to improve resource efficiency and improvements to existing production facilities. 

Moreover, the EIB’s support will enable Fagor Ederlan to strengthen its competitiveness and create qualified job positions by making strategic investments in key internal processes such as digital transformation, one of the cooperative’s key goals. Edertek, Fagor Ederlan’s technology centre, employs sixty engineers exclusively engaged in R&D and another four hundred distributed among its seventeen plants worldwide.

This will be the EIB’s first operation with Fagor Ederlan, although the bank has already worked with six MONDRAGÓN Corporation cooperatives.

EIB Vice-President Ricardo Mourinho Félix has stated: “We are very proud to finance Fagor Ederlan's RDI strategy, promoting the digitalisation and advanced production techniques of the company through greater sustainability that will undoubtedly enable it to strengthen its competitiveness. The EIB continues to support innovation in the automotive sector in Spain by financing and cooperating with several companies in the sector during the pandemic. This operation demonstrates the EIB's strong commitment to an economic recovery based on innovation and environmental protection, as well as to supporting the automotive industry, which is key to the Spanish economy and job creation — the EIB's priority objectives in Spain”.

The General Manager of Fagor Ederlan Group, Juan María Palencia, said: “The automotive sector is undergoing a transformation process and the next four years will be critical to meeting the challenges that this entails. We are very grateful to the EIB for granting this financing because to us it is also a sign of confidence in our future project. Innovation and digitalisation are the main driving forces of change in our strategy for sustainable mobility and the EIB’s support will enable us to tackle these projects faster and with greater security”.  

General information

The European Investment Bank (EIB) is the European Union’s long-term financing institution and is owned by the Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy objectives.

The EIB Group has recently adopted its Climate Bank Roadmap to deliver on its ambitious agenda to support EUR 1 billion of climate action and environmental sustainability investments in the decade to 2030 and to deliver more than 50% of EIB finance for climate action and environmental sustainability by 2025. Also, as part of the Roadmap, from the start of 2021 all new EIB Group operations will be aligned with the goals and principles of the Paris Agreement.

About Fagor Ederlan Group

The Fagor Ederlan Group is a leading supplier of automotive components specialising in chassis, powertrain and vehicle structure applications. It provides advanced solutions with high technological value in all its product lines. As a supplier to the main vehicle manufacturers worldwide, its mission to provide streamlined, customised service to clients has led to the group’s international expansion, enabling Fagor Ederlan to become a global supplier with seventeen plants in the main regions of the automotive sector such as Europe, Mercosur, Asia and North America.

Employing more than 4,000 qualified experts and composed of around 1,900 partners, it is one of the largest cooperatives by number of partners in the MONDRAGON Corporation’s industrial area. Its commitment cooperative-based job creation and more environmentally-friendly production processes still constitute its key strategies.