The European Investment Bank (EIB) will examine whether Volkswagen used any loans from the European Union to cheat on emissions tests for diesel vehicles and could demand money back, EIB chief Werner Hoyer told a German newspaper.

“The EIB could have taken a hit [from the emissions scandal] because we have to fulfil certain climate targets with our loans,” the Süddeutsche Zeitung quoted Hoyer as saying in a summary of an article to be published on Monday.

Europe’s largest carmaker has admitted cheating in diesel emissions tests in the United States, and Germany’s transport minister says it also manipulated them in Europe, where VW sells about 40% of its vehicles.

The EIB has granted loans worth around 4.6bn euros (£3.4bn) to Volkswagen since 1990, among other things for the development of engines with lower emissions and manufacturing sites in South America, according to Süddeutsche Zeitung.

Of that figure, around 1.8bn euros are still outstanding, the paper said.

The EIB will conduct “very thorough investigations” into what VW used the funds for, Süddeutsche quoted Hoyer as saying on the sidelines of an International Monetary Fund meeting in Lima, Peru.

If it finds that the funds were used for purposes other than intended, the EU bank will have to “ask ourselves whether we have to demand loans back”, he said.

He also said he was “very disappointed” by Volkswagen, adding the EIB’s relationship with the carmaker would be greatly damaged by the scandal.