Swedish Koenigsegg moved closer to a takeover of Saab Automobile after the European Investment Bank approved a €400 million loans.

The European Investment Bank, EIB, on Wednesday approved €400 million ($599 million) in loans to loss-making Swedish car maker Saab Automobile.

In August General Motors confirmed it had signed a stock purchase agreement with Koenigsegg Group AB regarding the sale of 100 percent of the shares of Saab Automobile AB.

Wednesday’s approval by EIB was utterly good news for the Koenigsegg Group, backed by U.S. and Norwegian investors, as the deal has hinged on the EIB approving the loan. However, the deal is still dependent on guarantees for the loan from the Swedish government, which has been reluctant to provide any form of direct funding.

"The loan will be used for research and development activities for the improvement of fuel efficiency and safety including new tooling for the production of cleaner and safer cars, subject to the European Commission’s approval of the Swedish state guarantee", EIB wrote in a statement.

Koenigsegg Group, founded in 1994 by Christian von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year at more than a million euros (1.4 million dollars) each.

Saab, by contrast, employs 3,400 people in Sweden alone and sold just over 93,000 cars worldwide in 2008.