Car manufacturer Renault has been granted a €400 million (£343m) loan for research and development into affordable and environmentally friendly vehicles.

The project is aimed at improving Renault Group’s ecological credentials and exploring the options of making the vehicles significantly lighter by using different materials.

Renault is also seeking to develop new concepts for “next generation” engines – reducing the environmental impact of the engine manufacturing process and cutting carbon emission levels.

Philippe de Fontaine Vive, Vice President of the European Investment Bank (EIB), which provided the loan said: “Cutting-edge technologies are a spearhead for the future in terms of sustainable development and competitiveness. Through our support for innovation, we are preparing the future of the European motor industry. And the first to benefit will be the EU’s citizens, in their daily life.”

The EIB has provided nearly €1 billion (0.86bn) for Renault Group projects since 2009. It also recently provided €215 million (£181.6m) to help Greece extend its electricity networks and €500 million (£424.8m) to help France upgrade its electricity grid.