Egypt is planning on borrowing $1bn in concessional loans from a Chinese bank to finance sanitation networks.

The establishment of sanitation networks is expected to be for villages in the country’s Nile Delta north of Cairo.

Housing and Utilities Minister Mostafa Madbouly signed a deal with China’s Gezhouba Group Company, one of the largest Chinese construction companies, to establish sanitation networks for 250 villages in the Delta governorates of Menoufiya and Gharbiya, the state’s official news agency MENA reported.

It is also understood that Egypt will sign a $200m grant deal during the Chinese president’s visit to Cairo later this month. The grant is set to be used for investments in infrastructure, healthcare and the Suez Canal development area, according to MENA.

In September 2015, a memorandum of understanding (MoU) was signed with China State Construction Engineering Corporation to participate in developing parts of the new administrative capital.

The agreement was signed in order for the Chinese firm to explore development opportunities in the Capital City project.