Bahrain’s Diyar al-Muharraq has appointed the local Poullaides Construction Company to carry out work on 400 villas for its Deerat al-Oyoun housing project.

It is understood the $700m scheme will be awarded in three packages, with the other two contracts still being negotiated.

The other packages include the construction of 636 villas and an additional 200 villas, with an award expected by the end of the year, according to a source close to the project.

Each deal includes the construction of the villas as well as all associated facilities and infrastructure work.

The UK’s Mott MacDonald is the lead consultant.

Diyar al-Muharraq recently announced it has secured $366m in Islamic financing from four regional banks for the scheme.

The murabaha contract, which is a cost-plus profit Islamic arrangement, was signed with the local Al-Salam bank, Kuwait Finance House (KFH), Bank of Bahrain and the Al-Baraka Islamic Bank of Bahrain.

In June, MEED reported that KFH also announced that it will be financing part of the Deerat al-Oyoun scheme.

Many schemes under the housing ministry have received GCC funding, but with such financing likely to decrease the authority has been exploring alternative financing solutions as it remains committed to developing 40,000 housing units within 10 years.