Olympic Village granted £225m European loan

The European Investment Bank has approved the loan for work on the £1 billion Olympic Village, which will house athletes during the games. After the event it will be turned into housing, at least 30 per cent of which will be affordable.

The bank lends to member states to help them achieve aims that are in line with the wider objectives of the European Union. The ODA has not yet decided whether to draw on the finance.

A spokesman said: ‘The European Investment Bank has long been identified as a potential funding source for the affordable housing elements of the village as part of a private sector led banking consortium. This would be on commercial terms.

‘The approval of this part of the funding is a positive step while talks draw to a conclusion.’

The ODA is still holding discussions with the builder for the Olympic Village, Lend Lease, about funding for the scheme. It had expected to draw in significant private finance, but this has been hindered by the recession.

Earlier this year ministers gave the ODA £231 million to plug a gap in funding for the village.

The ODA spokesman said it expects to have concluded negotiations with Lend Lease this summer, and work on site is making good progress.