The multilateral financing institution Islamic Development Bank (IDB) has signed an agreement with Egypt’s International Cooperation Ministry to provide financing for the Egyptian-Saudi Arabia power link.

IDB will provide a $200m loan from the estimated $1.6bn project cost to build a cross-border power link between Egypt and Saudi Arabia.

The governments of Saudi Arabia and Egypt signed a memorandum of understanding (MoU) to build a cross-border power line on 1 June 2013. The connection will have the capacity to transport 3,000MW a day.

The project has faced a number of delays. Cairo and Riyadh originally planned to issue construction tenders for the cross-border, power-sharing network in the first quarter 2014. The governments are now hoping to award the contract before the end of 2015.

The scheme has been discussed for several years and was stalled following the political change in Egypt in 2011. The link will mean Egypt is connected to the GCC electricity network, which began operations in mid-2009. It is based on a study originally completed by the Arab Fund for Economic & Social Development.

Egypt is expected to fund about 40 per cent of the project, with Saudi Arabia scheduled to pay the remaining 60 per cent.

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