The European Commission (EC) has approved a grant worth €111 million (£75.6 million) for the development of a new Hyundai Motor car manufacturing plant in the Czech Republic.

Based in the Moravia-Silesia region, the factory is expected to boost the area's employment sector, which in turn may provide opportunities for overseas property investors.

Competition commissioner Neelie Kroes said: "I am glad to endorse aid for this important project, which will contribute to regional development and job creation in the Czech republic."

The project forms part of a programme of investment aimed at creating 4,400 jobs within the car sector before 2011, while also attracting other investors to the market and boosting the country's economic growth.

Hyundai expects the manufacturing plant in Nosovice to produce 200,000 cars each year, before possibly increasing its capacity to 300,000 vehicles by 2012.

In related news, the EC has announced that it has approved an aid scheme to help the country improve its rail network.

The Czech government has agreed to guarantee a loan of €30 million to purchase new rolling stock and to improve its rail services for passengers.

"The passenger rolling stock of Czech Railways is very outdated and needs to be replaced so as to reduce its failure rate and increase the reliability and safety of rail passenger services in the Czech Republic," the EC said.

Financing company Eurofima is to grant the loan to the Czech Republic.