The European Investment Bank (EIB) has approved a £255 million ($376 million) loan to help fund construction of the 2012 London Olympic Games Village.
The EIB said the loan, requested in February, was approved on Tuesday, according to its website. A spokesman for the bank was unavailable to provide further details.
The Olympic Village and the International Broadcast and Media Centre have both had their funding suffocated by the worsening credit crunch, with developers failing to attract private investment to cover their share of the costs.
A spokesman for the Olympic Development Authority (ODA), responsible for building venues for the Games, told Reuters on Friday the loan related to building athletes' accommodation that will be converted to social housing after the Games.
A slump in property prices, which could damage the chances of recouping money from the village after the Games, has already resulted in the number of post-Olympic apartments being reduced from 4,200 to about 3,000.
The ODA spokesman said talks were still taking place with Australian developer Lend Lease Corp on private sector funding for the 1 billion pound village.
“The European Investment Bank has long been identified as a potential funding source for the affordable housing elements of the Olympic Village as part of a private sector-led banking consortium,” the spokesman said.
“This would be on commercial terms. Approval of this part of the funding is a positive step forward while talks draw to a conclusion. Alongside this funding discussions are continuing with Lend Lease over wider Olympic Village development.”
“We expect all talks to have concluded this summer and in the meantime construction work on the village is making good progress and the project remains on track.”
In January, the government had to inject £461 million ($679 million) into the village and media centre with another £35 million of contingency covering increased costs on projects such as the Aquatics Centre and Olympic Stadium.
The overall budget for the Games remains £9.3 billion ($13.70 billion), of which £2.7 billion ($3.98 billion) is to cover contingencies. (Reuters)