STOCKHOLM - China's Huawei will start building its mobile phone network equipment factory in France next year, a source familiar with the matter said, pressing ahead with its first plant in Europe even as some European governments curb the use of the firm's 5G gear.

The company outlined plans for the factory with an initial investment of 200 million euros ($215.28 million) in 2020, but the roll-out was delayed by the COVID-19 pandemic, the source said on Monday. They declined to be identified because they are not authorised to comment on this matter.

The source did not give a timeline for when the factory in Brumath, near Strasbourg, will be up and running. Huawei did not respond to a request for comment.

The move comes even as some European governments restrict or ban the use of equipment made by Huawei and China's ZTE , citing security concerns.

European leaders are also debating how to "de-risk" but also cooperate with the world's second-largest economy. China is France's third largest trade partner behind the European Union and the United States.

In 2020, the French government told telecoms operators planning to buy Huawei 5G equipment that they would not be able to renew licences for the gear once they expire, effectively phasing Huawei out of mobile networks.

But following a meeting with French Economy Minister Bruno Le Maire in Beijing in July, China's vice premier He Lifeng said France had decided to extend Huawei 5G licences in some cities. ($1 = 0.9290 euros)

(Reporting by Supantha Mukherjee; Additional reporting by David Kirton in Shenzhen; Writing by Josephine Mason; Editing by Susan Fenton)