Egyptian Electricity Holding Company (EEHC) is in negotiations with the sole bidder for Egypt’s first publicly tendered large-scale independent power project (IPP).

Saudi Arabia’s Acwa Power submitted the sole bid for the 2,250MW Dairut IPP in the second week of March, just prior to the Egypt Economic Development Conference (EEDC), which was held from 13 to 15 March in Sharm el-Sheikh. The project will have an estimated total value of $2.5bn.

According to sources close to the project, the client is in negotiations with the Saudi developer, but due to the project not being a fast track scheme, the power purchase agreement (PPA) is unlikely to be signed before the end of 2015.

It is understood Saudi Arabia’s Acwa Power was the only group to submit a bid as other bidders had requested a further extension to the deadline, but the client 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.

Three build-own-operate-transfer (BOOT) IPPs started up in the early 2000s, each comprising two steam turbine units of about 340MW. The first was undertaken by Intergen, a developer then affiliated with the US’ Bechtel, and Italy’s Edison at Sidi Krier, east of Alexandria. Two more followed, in Suez and Port Said East, carried out by France’s EDF International.

In 2009, the government revived plans for private sector involvement in the power sector and EEHC issued a tender for a build-own-operate combined-cycle plant at Dairut.

EEHC received 19 applications for the prequalification phase, one of which was approved. By the time of the revolution in January 2011, the government had yet to conclude agreements with legal and financial advisers, and there was no progress with the scheme until early 2013.