Orascom Construction Limited (OC) signed contracts to covert two power plants, in Assiut and West Damietta, from simple cycle to combined cycle.

Orascom Construction stands to earn a reported $420m in the deal.

Ministry of Electricity spokesperson Mohamed El-Yamani stated that OC’s contract is with the Egyptian Armed Forces.

Currently, the capacity factor of the Assiut power plant is 1,000 MW, while West Damietta’s capacity factor is 500 MW. Converting the plants will increase their combined capacity factor by 50%, to reach 2,250 MW.

OC Manager of Investors Relations Hesham El-Halaby said the construction of the plants began in mid-December 2014 and was finalised in the third quarter of 2015.

The company said: “both plants will be completed on an EPC [engineering, procurement and Construction] + Finance basis whereby OC helps arrange a competitive financing package on behalf of the client.”

OC will assist the Egyptian government in procuring the project’s necessary funds from financial institutions.

“We are proud of our continued leadership in the development of Egypt’s power sector and are pleased to continue working on Assiut and West Damietta power plants following the milestones achieved at both sites,” CEO of OC Osama Bishai said.

“We look forward to further growth of our power business across our core markets as a contractor and a developer,” he added.

Orascom Construction and Siemens are currently building two combined cycle power plants, each with a 4,800 MW capacity factor. Orascom has claimed that the two are the largest power plants in the world. The first power plant is located in Kafr El-Sheikh governorate, while the other is in the new capital.

The contract value for each power plant is €2bn. OC will earn €1.6bn in the combined contracts. OC provided a 15-year financing package to the Egyptian Electricity Holding Company for the full payment of its €1.6bn.  .