Russia set for major investment in Egypt
Moscow is planning on making a major investment to build a Russian industrial zone within Egypt’s new Suez Canal Economic Zone, the news agency TASS reported on Thursday, citing the Industry and Trade Ministry.
According to the outlet, Russia will allocate 9.5 billion rubles ($97.4 million) in budgetary funds to the project by 2026, which is currently in the process of being ratified in the Egyptian parliament.
The agreement to establish a Russian industrial zone in Egypt was signed in 2018. The venture will encompass an area of 5.25 million square meters on a usufruct basis and will be implemented in three phases over 13 years. The estimated cost of the first phase is about $190 million, according to the Egyptian Ministry of Trade and Industry.
The total volume of investments in the industrial zone, which will be called ‘Sun City’, is expected to amount to $4.6 billion.
In March, Denis Manturov, a Russian deputy prime minister who also serves as trade minister, signed a protocol amending an initial agreement on the project with his Egyptian counterpart Ahmed Samir Saleh. The changes introduced by the protocol suggest that the zone will consist of two parts, according to Georgy Borisenko, the Russian ambassador to Cairo.
“One part is in the north of the Suez Canal, near Port Said, on the eastern shore of the Suez Canal. Another part of the zone is in the southern end of the Suez Canal, in the area of the city of Ain Sukhna. Consequently, Russian producers will be able to choose the most convenient location for their production, near the Mediterranean Sea or the Red Sea, depending on what they want to do with their products, where to bring them,” he explained.
After the ratification process is completed Russia will prepare a design and cost estimate for the construction of the industrial zone, which is due to start next year.
‘Sun City’ is slated to serve as a hub for Russian manufacturers and facilitate their access to markets in Egypt, the Middle East, and Africa. The project will house a range of entities, including in the automotive, pharmaceutical, oil and gas, and mining industries, as well as those manufacturing equipment used in nuclear energy, according to the Egyptian government.
The project is expected to create 35,000 jobs. Businesses operating in the zone will be provided with preferential tax treatment.
