Athens-based Terna has been awarded a $108m construction contract for the development of 832 housing units in Bahrain.

The contract, which was awarded by Ithmaar Development Company (Naseej) under the public private partnership (PPP) structure with the Ministry of Housing, will last 30 months.

The project will be developed on a plot area of 321,350 square meteres in the Al-Luwzi area of Bahrain.

In 2013 Bahrain took a vital step in addressing the shortage of low-cost homes with the announcement that the first PPP housing project had reached financial close. .

Last May, a target was set to build more than 40,000 government homes in eight years.

The scheme had been launched before the 2011 unrest, with a consortium led by the local Naseej appointed preferred bidder in late 2010.

The project is being managed by US-based Hill International and entails the construction of more than 2,800 social and affordable housing units over a five-year period in Al-Madina al-Shamaliya and Al-Luwzi.

At Al-Madina al-Shamaliya, 1,618 social housing units will be built, along with 367 affordable villas and apartments. In Al-Luwzi, Naseej promised to develop 832 social units to be delivered to the housing ministry to allocate to families on its waiting list.

Although the scheme took three years to reach financial close and was trimmed in size due to concerns about its feasibility, it set an important precedent not just for Bahrain, but for the whole region. It was the first housing PPP negotiated in the Middle East, as well as the biggest single project ever awarded by Bahrain’s Housing Ministry. The legal adviser was the UK’s Trowers & Hamlins.