EIB Provides a Loan for the Olympic Village Construction

The Olympic Games, which will be held in London in 2012 have caused serious problems for the construction industry lately. The construction of the Olympic Village was under risk as it seriously lacked finance due to the economic downturn. However, it was recently announced that the European Investment Bank (EIB) has eased the burden by providing a £95 million loan agreement, which can be used for the purchase of flats for athletes in the Olympic Village development. Triathlon Homes will use the money provided by the European Investment Bank to acquire 1,397 out of 2,800 apartments, which are to be built in the Olympic Village. As it was mentioned in the article published by the Guardian, the European Investment Bank decided to come into the deal for 2 reasons: first, the Olympic Village will definitely represent a valuable historic legacy in the future; second, the construction of the Village will contribute to the regeneration of the area. Initially, 30% of houses, which are to be built in the development, were planned to be used for the purposes of social housing; however, the difficulties associated with the credit crunch have resulted in the increase of this figure up to 50%. Triathlon Homes, which are said to purchase the properties, represent a joint project between an urban development company called First Base and a couple of London housing associations. Simon Brooks, the spokesman for the European Investment Bank claimed that the bank’s major objective is the development of sustainable communities. The £95 million loan by EIB will be used by Triathlon Homes in addition to a £65 million loan from the Barclays Commercial Bank to secure a pre-sale deal with the organization in charge of the Olympic Games 2012 – the Olympic Delivery Authority. The Homes and Communities Agency (HCA) is expected to provide another £110 million grant shortly. It should be noted that the loan provided by the European Investment Bank eases off some of the difficulties that the Authority faced as the initial budgeting for the Olympic Games was estimated at £9.3 billion.