The first phase of the project will cost EUR 70m and create 141 jobs, the ministry told the STA a day after the contract was signed on Thursday. The incentive will be paid out over the course of three years.

The new facility will be built near Lek's existing plant in Prevalje, which has been producing broad-spectrum antibiotics for four decades. The new plant will feature state-of-the-art equipment for the production of a broad-spectrum antibiotic.

The ministry said that the incentive was a step to start equating domestic and foreign investors. Lek meanwhile said that it vied for the funds because it believes that state support for foreign investments was key to making the country more attractive to foreign investors.

This is the first incentive for Novartis from Slovenia, Lek said, adding that the remaining 90% of the investment will be provided by the Swiss group.

The total value of the project is estimated at EUR 105m and is the single largest investment by Novartis in Slovenia. Since taking over Lek in 2003, the Swiss group has invested over EUR 1.9bn in Slovenia. EUR 1bn went into R&D and the rest into production lines.

Once completed, the new plant will provide 150 new jobs, Lek said, adding that Novartis has created more than 1,400 jobs in Slovenia in the past five years.

The government expects the incentive to return several times over. In the coming three years alone it expects to collect EUR 4.2m in taxes and contributions. The effects of the investment for Slovenia are estimated at EUR 80m.