Egypt’s Suez Canal Authority has signed an agreement with Saudi investors forming a joint-stock company to operate in the Ain Sokhna area, according to a statement from the authority’s head Mohab Mameesh.

The $1bn investment will see the authority and an unnamed Saudi investor establish an iron and steel factory in the proposed industrial area of the Suez Canal corridor (SCZone).

Mameesh said in his statement that the new factory would be built on land owned by the authority to operate with the capacity of 1.2 million tonnes of steel annually.

Cairo has been keen on pressing ahead with large industrial schemes in a bid to diversify its economy. The Suez Canal Economic Zone (SCZone) stands out as the most major projects proposed by the government.

Despite little progress in drumming up investment to date, Egypt is planning to develop a master industrial and logistics zone surrounding the main ports of the Suez Canal. The government has already approved the laws establishing the General Authority of the Economic Zone of the Suez Canal (GAESC), changing the area into an economic authority, allowing the SCZone to act as a single window able to deal with investors directly.

In August this year MEED reported that the authorities appointed three consultants to value the land of the proposed Suez Canal Economic Zone (SCZone), according to a statement made by the head of the General Authority for the Suez Canal Economic Zone (GAESC), Ahmed Darwish, at a press conference in Cairo.

GAESC has appointed three local firms – Misr Capital, Al-Nour Consulting Group and Global Appraisal Tech (GAT) – to carry out various studies in order to value the land in the West and East Port Said, Ain Sokhna, Adabia, Al-Arish, and El-Tor areas.

Earlier this year, Darwish told MEED the investment needed is estimated at $50bn, with $20bn in industrial and other areas, $15bn for infrastructure and utilities, and $15bn for enhancing ports.