BRATISLAVA, Slovakia — On Tuesday, the Slovak government officially entered into a memorandum of understanding with Hyundai Mobis pertaining to the South Korean corporation’s initiative to establish a facility for producing engines and components tailored for electric vehicles in Slovakia.

Prime Minister Robert Fico announced that Hyundai Mobis is set to allocate more than 170 million euros (approximately $185 million) towards the construction of this new plant, which will be situated in Novaky, a town in the western region of Slovakia.

This region has historically depended on brown coal mining, but recent closures of local mines, along with the shutdown of a significant coal-fired power plant in Novaky, have prompted a shift in economic opportunities.

Fico further indicated that his administration plans on offering roughly 26 million euros (around $28 million) in incentives to Hyundai Mobis, a move he believes will facilitate the ongoing economic transition in an area that is moving away from coal dependency.

Notably, Slovakia holds the distinction of being the leading vehicle producer per capita globally.

The country is already home to significant manufacturing operations from major automotive companies, including Germany’s Volkswagen, the multinational Stellantis (formerly PSA), South Korea’s Kia Motors Corporation, and the U.K.-based Jaguar Land Rover, all of which have established large plants in this Central European nation, which has a population of 5.5 million.

Additionally, Swedish luxury car manufacturer Volvo Cars has announced plans to set up an electric vehicle production facility in Slovakia within the next two years, highlighting the region’s growing presence in the electric automotive sector.