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The European Investment Bank confirmed a 95 million pound loan on Wednesday to help fund the purchase of athletes' flats in the London 2012 Olympics village, which will be converted into social housing after the Games.

The loan from the EU's long-term finance house has been approved for Triathlon Homes to buy 1,379 apartments to provide a lasting legacy for London.

Nearly half of the 2,800 flats in the Olympic village will now be dedicated to social housing afterwards, up from the initially planned third.

The EIB said it agreed to the loan with Triathlon, a joint venture between urban development company First Base and two local housing associations, because it contributed to the regeneration of a previously deprived area east London.

"The creation of sustainable communities is a key lending objective for the EIB," said the bank's Simon Brooks on its website.

The loan is separate from a 255 million pound loan agreed in April, which has been scrapped.

Triathlon Homes will invest 269 million pounds in the pre-sale deal with the Olympic Delivery Authority, the London 2012 organisers.

In addition to the 95 million pound loan, funding will come from a 64 million pound loan from Barclays Commercial bank.

The rest of the investment will come from a 110 million pound grant from the Homes and Communities Agency (HCA).

The Olympic Park has struggled to secure private financing in the credit crunch, with the Olympic village and the International Broadcast and Media Centre being taken into public sector hands.

A slump in property prices, which could damage the chances of recouping money from the 1 billion pound village after the Games, has already resulted in the number of post-Olympic apartments being reduced from 4,200 to about 2,800.

The overall budget for the Games remains 9.3 billion pounds, of which 2.7 billion pounds is to cover contingencies.

(Source: Reuters)