The Arab Fund for Economic & Social Development has granted a TD67.5m ($51.9m) loan to Societe Tunisienne de l’Electricite et du Gaz for the construction of the Ghannouch power plant.

The loan brings the fund’s total contribution to the scheme to TD180m. The total cost of the project is estimated at TD730m.

The combined cycle power plant, located in the south of the country, will have a capacity of 400MW.

France’s Alstom won the engineering, procurement and construction contract for the project in July 2008. The company also won a 12-year contract to provide operation, support and maintenance services.

The plant will use natural gas as primary feedstock with gasoil as a backup fuel. It is scheduled to begin operation in March 2011.