April 23, 2015 / 4:08 AM / 4 years ago

Volkswagen to get Canadian financing for U.S., Mexico plants

Workers walk past a Volkswagen logo at the Volkswagen plant in Sao Bernardo do Campo, near Sao Paulo January 8, 2015. REUTERS/Nacho Doce

OTTAWA (Reuters) - German car maker Volkswagen AG (VOWG_p.DE) will get 400 million Euros ($407 million) in trade financing from Canada to help expand its southern U.S. and Mexican operations and thereby generate business for Canadian firms, Ottawa said on Thursday.

The trade-financing agency Export Development Canada (EDC) said it would match Volkswagen with qualified small and medium-size Canadian companies.

“With the southern U.S. and Mexico increasingly becoming prime production locations for global automakers, EDC has a role to play in making sure Canadian companies have the opportunity and financial wherewithal to compete for that business,” Carl Burlock, EDC senior vice president, said in a statement.

Volkswagen said in March it would invest about $1 billion to expand its vehicle assembly plant in Mexico’s Puebla state.

An EDC spokesman said that since 2003, the agency had provided a total of C$33 billion ($27 billion) in financing for foreign companies, resulting in C$48.7 billion worth of contracts for Canadian firms.

Reporting by David Ljunggren; Editing by Ted Botha

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