Saudi Arabia’s Acwa Power is in talks with a group of UAE and international banks to explore financing options to fund its bid for a $2.5bn Egyptian power project.

The Saudi developer, along with its local partner Hassan Allam Construction, is looking to raise funds in excess of $1bn for the 2,250MW Dairut IPP, one of the country’s largest publicly-tendered independent power projects (IPP), according to two sources familiar with the talks. The structure of the financing or the final size of the loan has yet to be decided, said one of the sources.

“Dairut is a direct award and negotiations are currently happening on the technical side. Until that is done, financial details will not be finalised,’’ said the source without giving further details.

A spokesman for Acwa did not respond to calls or an email requesting comment.

MEED reported last week that the Egyptian authorities are engaged in discussions with the Saudi developer, however, as the project is not a fast-track scheme, the power purchase agreement (PPA) is unlikely to be signed before the end of 2015.

Acwa Power submitted the bid for Dairut IPP in the second week of March, just prior to the Egypt Economic Development Conference (EEDC) in Sharm el-Sheikh.

It is understood that Acwa Power was the only group to submit a bid for the project, as other bidders had requested a further extension to the deadline, but the client, Egyptian Electricity Holding Company (EEHC), was keen to push ahead with the project, particularly with the EEDC planned the same week as the deadline.

The combined-cycle Dairut project is regarded as a key scheme for Egypt’s development, being the largest IPP tendered to date and also the first one in the market since the late 1990s. At the EEDC, the Electricity & Energy Ministry revealed it was planning for $25bn of the total $70bn of total investment required in the power sector in the period up to 2022 to come from the private sector.