Egypt, which is grappling with an energy crisis, needs at least $5 billion to upgrade its outdated electricity generation system, a government official told Reuters in April.

The IDB loan is for a plant in Helwan, south of Cairo, expected to generate 1,950 MW, a statement from the ministry of electricity said.

The total cost of the station is estimated at 12.5 billion pounds, with additional funding coming from other regional and international funds, the statement said. It is expected to come on line in stages during 2017 and 2018.

New plants are badly needed to boost power capacity to meet soaring consumption in the Arab world's most populous country. Officials say that Egypt lacks capacity reserves, needed in case plants need to close unexpectedly for maintenance.

Renovation of run-down power plants is also needed. The Electricity Ministry says that about a quarter of Egypt's 51 power stations are more than 20 years old.

($1 = 7.1501 Egyptian Pounds) (Reporting By Stephen Kalin; editing by John Stonestreet)