Egypt’s Damanhour combined cycle power plant, worth $1.32bn, has been earmarked a $200m loan from the European Bank for Reconstruction & Development (EBRD).

A total of four development banks intend to take part in financing the 1500-1800MW project.

The European Investment Bank (EIB) will provide up to 50 per cent of the project costs, but is still in negotiations with the clients, the Egypt Electricity Holding Company (EEHC) and the West Delta Electricity Production Company (WDEPC). The EIB’s tranche is likely to be between $500m and $600m.

The African Development Bank (ADB) and the Kuwait-based Arab Fund for Economic and Social Development are also in discussions. According to press reports the ADB will contribute $100m.

EEHC and WDEPC will fund the remainder of the project costs.

Tenders for the steam turbine generators and air cooled condensers are expected in early 2016.

Bids for the main construction contract were due in May 2015.

The project was previously put on hold due to gas shortages.

The power plant forms part of Cairo’s efforts to meet the rapidly increasing demand for power. Peak load has risen from about 13,300MW in the 2001/02 fiscal year to 27,000MW in 2012/13. Peak demand grew by 6 per cent in 2014 and is forecast to continue expanding at this rate until 2022.

The Electricity & Energy Ministry is planning to develop 54GW of new power capacity by 2022, at a rate of about 6.5GW a year. At the Egypt Economic Development Conference (EEDC), held in Sharm el-Sheikh in March, the ministry signed agreements for nearly 40GW of new generation capacity.

This includes 16.4GW of procurement contracts with Germany’s Siemens, worth $9bn, which were signed earlier in June.