Zone in Suez region expected to attract $2.5bn in Chinese investments.
China will set up an industrial zone in Egypt's Suez region at an infrastructure cost of $100 million and it is expected to ultimately attract $2.5 billion in Chinese investments, Egypt's trade ministry said on Tuesday.
The ministry said in a statement that China would also give Egyptian firms a $200 million credit line for production lines and technology transfers from China. The line has a seven-year grace period and interest rates of no more than 2%.
Egypt hopes to eventually increase the credit line to $1 billion, the ministry said.
The Suez industrial zone, to be completed over 13 years, would attract investment from Chinese firms operating in industries such as textiles and ready-made garments, gas and petroleum pipes, cars and car components, and electronic equipment.
"This new zone will serve as a hub in the region for Chinese manufacturers looking to move closer to markets throughout the Middle East and Africa," Egyptian Trade and Industry Minister Rachid Mohamed Rachid said.
The ministry said the first phase of construction will last three years and cover one square kilometre and is expected to attract $250 million in Chinese investment.
The second phase will be completed over 10 years and cover an additional four square kilometres. The final zone was expected to attract $2.5 billion.
Rachid said last year that he expected China to overtake the US and become Egypt's largest individual trading partner within seven or eight years.
Two-way trade between Egypt and China in the first nine months of this year has totalled more than $3 billion, the vast majority of that from Chinese imports to Egypt.