Commission approves state aid to Franco-Chinese R&D project

September 18, 2006

Brussels, 15 Sep 2006

The European Commission has given France the all-clear to grant €100 million in state aid to a Franco-Chinese research and development (R&D) project at Eurocopter, a subsidiary of European Aeronautics Defense and Space (EADS). If commercially successful, the grant will be refunded.

The project aims to develop a medium-size state-of-the-art civilian helicopter, the EC175. According to the manufacturers, the helicopter will be designed to be greener and safer than existing models, and able to fly in more difficult weather conditions. The project is expected to last five years, with the product ready for delivery around 2011.

Commenting on the Commission's decision to give the project the green light, Competition Commissioner Neelie Kroes said: 'I am happy to be able to approve an aid project which promotes research in a leading-edge technology sector.'

The state aid granted by the French government will account for 29 per cent of the project's overall R&D expenditure. According to the Commission, the public-sector support would help reduce the technological risk and encourage the joint venture to carry out 'more extensive and more ambitious research'. Eurocoptor says that it aims to increase the ratio of its R&D investment in relation to turnover by two points.

In total, Eurocopter and the Chinese company AVIC II will each invest ⒔300 million to develop the new helicopter. Production will be equally split, and each country will have its own assembly line. Sales forecasts for the helicopter predict 800 to be sold worldwide over the next 20 years. If successful, the project will return to the French government the grant money.

This latest approval by the Commission is in line with the recently reformed state aid rules which aim to encourage greater investment in research and development (R&D) and innovation.

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