Tight international credit market conditions have delayed a $2.2 billion power and water project in Bahrain, the chief executive of Gulf Investment Corporation (GIC) said on Monday.

The credit crunch has slowed the flow of capital to the region, leading to a slew of project delays and cancellations. Private sector projects have been hurt the most.

The Al Dur project is 50 per cent owned by GIC, with France's GDF Suez owning the other 50 per cent.

'Due to the financial crisis, some of the loaning banks have withdrawn from the project,' chief executive Hisham al-Razzuqi told Reuters by telephone. The project would be delayed by a few months, he added.

Al Dur was due for completion in 2011. The plant will have power generation capacity of 1,234 megawatts, and will be able to desalinate 218,000 cubic metres of water per day.

GDF Suez has contacted a group of banks over financing the plant, Reuters Loan Pricing Corporation (RLPC) reported earlier this month.

Calyon, Mashreqbank and Standard Chartered had committed $100 million to the financing, RLPC reported.

The Al Dur plant will be located in the south of Bahrain, about 40 km from Al Ezzel, another power generation plant in which GDF Suez has a 45 percent stake.-Reuters