The government will fund the £1 billion Olympic Village for the 2012 games, which is to form affordable housing after the event, without private investment.
The Olympic Delivery Authority has told the developer for the scheme, Lend Lease, that it will not be using any private funding to support the scheme. It has also turned down a £150 million equity investment from Lend Lease.
The developer will continue to design and build the village, under an agreement signed in August 2008.
Dan Labbad, chief executive officer of Lend Lease Europe, said: ‘Lend Lease submitted a highly competitive bid which offered to invest equity of £150 million in the project, but the government and the ODA have decided that the overall risk return criteria for this type of project in the current market environment is not conducive to private funding.’
At one point private funding was expected to cover around half the cost of the Olympic Village, but the economic slowdown made it difficult to attract investors.
Last month the ODA announced it has been given access to a £225 million loan through the European Investment Bank, which invests in projects run by European Union members that are in line with EU objectives.
After the games the village will be turned into around 3,000 homes, 30 per cent of which will be affordable housing.
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