WARSAW -- The European Bank for Reconstruction and Development, a banking consortium and Fiat Auto Spa have signed a 288.5 million Deutsche mark ($175 million) financing deal to support Fiat's expansion in Poland.Charles Wrangham, the EBRD's team leader in Poland, told a news conference Friday the agreement involved a 82.5 million mark direct equity investment in Fiat Auto Poland SA and 206 million marks in medium-term loans arranged by the EBRD and a banking consortium led by the Polish Development Bank."It is a project all lenders here are proud to support since the investment represents key commitments that can transform a home industry ... not just the automobile manufacturing industry but also the component industry which supplies it," Wrangham said.Fiat Auto's deputy president, Giuglielmo Capra, said the financing would be used to modernize the company's production lines in Bielsko-Biala and Tychy, in southern Poland, and to develop a new model to be produced solely in Poland."We needed outside financing to modernize production facilities, improve environmental protection standards and to develop a new model," Capra told reporters.He said Fiat would start working on its new Polish model, similar in size to the Uno type, in 1998.Wrangham said the EBRD would contribute 66 million marks to Fiat Auto Poland's capital acquiring a 13.4 percent stake in the company.The Italian public merchant bank SIMEST would pitch in another 16.5 million marks, getting a 3.3 percent stake.Before the capital increase Fiat Spa controlled 94 percent of its Polish venture with the Polish state holding a 6 percent stake.After the investment it would have 78.4 percent of shares and the Polish government 4.9 percent.Under the agreement EBRD would also finance 45 percent of a 140 million mark loan with the rest syndicated to a group of European banks comprising Banca Commerciale Italiana, Credit Lyonnais, Soci?t« Generale, Creditanstalt, ING Bank and Berliner Handels-und Frankfurter Bank.The remaining 66 million marks loan would come from a consortium of nine Polish and international banks operating in Poland arranged by the Polish Development Bank.The consortium consisted of Amerbank SA, Bank Gdanski SA, Bank Handlowy SA, International Bank in Poland SA, ING Bank Warsaw -- Internationale Nederlanden Bank's Polish branch, BRE SA and …sterreichische Investitionskredit.The president of the Polish Development Bank, Wojciech Kostrzewa, said 17.5 million marks would be provided by the European Investment Bank.He also said the 66 million mark loan was the largest commercially syndicated loan organized in Poland to date.In 1993 Fiat Auto Poland, a subsidiary of the Italian Fiat Spa is the largest carmaker in the former East Bloc outside Russia.It built 281,000 cars last year, of which 150,000 of the Cinquecento model were exported and reported about $1 billion in sales.