Airbus is set to receive a €3 billion loan from the European Investment Bank, marking the largest corporate loan ever approved by the institution.

European aerospace leader Airbus SE (EPA: AIR), whose shares declined 0.82%, will secure a €3 billion (equivalent to $3.42 billion) loan from the European Investment Bank. This move comes as the European Union intensifies efforts to bolster its domestic technological capabilities to counter increasing competition from the United States and China.

The European Investment Bank stated that an initial tranche of €1 billion was finalized during a signing ceremony in Brussels on Monday. The funds are designated to support Airbus's research and development in aerospace technologies within Europe. This financing package will back various investment initiatives by Airbus through 2030, spanning commercial aviation and defense and security sectors, with projects to be implemented in France, Germany, and Spain.

Airbus submitted the loan application six months ago, and this approved corporate loan sets a new record for the largest single corporate loan ever issued by the European Investment Bank.

As trade relations between regions like Europe and the U.S. grow increasingly tense, policymakers are ramping up support for key industries such as defense and technology. In response, the European Investment Bank has increased its financial backing for these sectors. Nadia Calviño, President of the European Investment Bank, stated in a declaration, "The EIB Group is fully committed to reinforcing Europe's technological sovereignty, industrial strength, and economic competitiveness." She added that this financing package is a clear demonstration of Europe's ability to support its leading corporations efficiently and on a significant scale, securing a competitive position within the new geopolitical landscape.

This policy bank, owned by the 27 member states of the European Union, has recently intensified its financial support for the defense and technology industries to navigate an increasingly tense international trade environment. In October of last year, Airbus also entered into a partnership with Italy's Leonardo and France's Thales to form a joint venture, aiming to better compete with Elon Musk's SpaceX.

Airbus Chief Financial Officer Thomas Toepfer remarked, "This loan offers highly favorable terms and significant flexibility in fund usage. It allows us to optimize our balance sheet efficiently, minimize the cost of holding capital, and ensure sustained investment in long-term technological innovation within the aerospace sector."