Bahrain’s Shura Council has unanimously approved legislation that allows the government to secure a $200 million loan from the Islamic Development Bank (IsDB). This loan will finance the construction of the new 400kV Al Jasra electricity station, which is part of a broader $465 million financing plan aimed at expanding Bahrain’s national electricity transmission network.

The project is vital for addressing the kingdom’s increasing power demands by 2027 and for enhancing energy integration within the Gulf Cooperation Council (GCC) electricity network. Electricity and Water Affairs Minister Yasser Humaidan highlighted the importance of the project during a recent session of the Shura Council, emphasizing its role in future-proofing Bahrain’s energy infrastructure.

Humaidan stated that the complete project will introduce the Al Jasra station as an addition to four existing main plants, increase the number of substations from 36 to an unspecified higher number, and add 30 kilometers of underground cables connecting Ramli, Seef, and Salman Town. Moreover, it will enhance Bahrain’s electricity exchange capacity with the GCC network, boosting shared capacity from 926 MW to 1 300 MW and increasing electricity exchange voltage from 220kV to 400kV.

The minister outlined the financing structure, indicating that the IsDB loan accounts for approximately 43 percent of the overall project cost, with the remaining $265 million still being sourced. Humaidan noted that the government is actively coordinating with local, regional, and international partners to secure additional funding through development loans, budget allocations, and strategic partnerships.

The loan agreement offers favorable terms, including a 20-year repayment period with a three-year grace period and competitive borrowing costs, as noted by Humaidan. Khalid Al Maskati, chairman of the Shura Council’s financial and economic affairs committee, praised the government’s financial management of the project, describing it as a crucial investment in national infrastructure and energy security.

Al Maskati underscored the strategic significance of the Al Jasra project, asserting that it supports Bahrain’s 2030 economic vision and enhances domestic power delivery alongside regional energy exchange through the GCC grid. He assured council members that the government’s role as guarantor is a standard financial practice intended to build trust among lenders.

Council members welcomed the legislation but sought further clarifications. Dr. Ibtisam Al Dallal stressed the project’s strategic relevance in promoting Bahrain’s shift towards renewable energy sources. However, she raised concerns about the $265 million still needed for full financing and the potential impact on the project’s timeline if funds are not secured swiftly.

Additionally, Dr. Ahmed Al Arrayed expressed environmental concerns regarding the project’s proximity to residential areas. He thanked the government for advancing such critical infrastructure while inquiring about the energy source planned for electricity generation. Humaidan responded that natural gas would be the primary fuel source, ensuring minimal environmental impact and compliance with international emissions standards.

The loan agreement is expected to be formally ratified by His Majesty King Hamad, following the Shura Council’s unanimous approval, which will allow construction to begin on one of Bahrain’s largest electricity infrastructure projects in recent years. The loan deal was previously approved by Parliament earlier this month.