A model of a planned new capital for Egypt is on display at an economic conference in Sharm El-Sheikh, Egypt, March 13, 2015. (Photo: Fouad Mansour)
Egypt signed a framework agreement with China Fortune Land Development (CFLD) to develop the second and third phase of construction in the new administrative capital east of Cairo with an investment of $20 billion, the cabinet stated on Monday.
In its statement, the cabinet said that the first and second phases aim to draw in foreign investments of $15 billion by June 2020.
The agreement, signed by Egypt's housing and investment ministers, states that the Chinese company will "manage, develop and market" more than 14,000 acres in phase two of the megaproject including all relevant infrastructure, accommodations and work facilities, while the government would provide it with all necessary permits.
The construction of the first phase, executed by local construction companies, started in April this year and is expected to be completed in two years.
The new capital, which is part of President Abdel-Fattah El-Sisi’s plan to boost the Egyptian economy through a series of mega-projects, is estimated to cost $45 billion.
The megaproject's first phase will include the construction of 12 ministries and a number of other governmental institutions, a residential area that will have more than 25,000 housing units, and the world's biggest park.
Per the agreement, CFLD will organise a conference for 3,000 partner companies in China to attract investments to Egypt.
In January, the Egyptian government announced during Chinese President Xi Jinping's visit to Cairo a finance package from China worth $15 billion – including commercial and soft loans – for FX reserves to support and projects in energy, transport and sanitation. Part of this package is expected to be invested in the infrastructure of the new capital.