The European Commission has approved Slovakia’s 125 million euro funding to Jaguar Land Rover

On 4 October 2018, the European Commission found that Slovakia’s 125 million euro support to the car manufacturing company Jaguar Land Rover for its project to build a new car plant in the region of Nitra is in line with EU State aid rules.

According to EU law, State aids having a high amount have to be notified to the Commission for individual assessment and clearance. Under the Guidelines on Regional State Aid for 2014-2020, in order to approve an aid measure, the Commission has to verify that some conditions are met. In particular, the aid must effectively encourage the beneficiary to invest in a specific region, it has to be kept to the minimum necessary to attract the investment to the disadvantaged region and it must not have undue negative effects on the market. Moreover, the aid must not exceed the regional aid ceiling applicable to the region in question, it must not directly cause the relocation of existing or closed down activities from elsewhere in the European Union to the aided establishment and it must not divert investments away from another disadvantaged European region.

Jaguar Land Rover is investing 1.4 billion euro to build a car manufacturing facility in the region of Nitra, which is an area eligible for regional aid under Article 107, paragraph 3, letter a) of the Treaty on the Functioning of the European Union (TFEU).

Following the in-depth investigation opened in May 2017, the Commission found that Jaguar Land Rover considered several locations for the new car plant and, without the Slovakian investment aid, the project would have been carried out in Mexico. The investigation also showed that the aid was limited to the minimum necessary to trigger the decision by Jaguar Land Rover to carry out the investment in Slovakia and that it will contribute to job creation as well as to the economic development of the region.

In its investigation, the Commission also noted that the infrastructure measures financed by Slovakia to develop the industrial estate where the new plant will be located will not only benefit Jaguar Land Rover, but also other companies located in the Nitra region. Finally, the Commission found that the transfer to Jaguar Land Rover of a 185 hectare plot for the building of the car plant was carried out at market price.