The Egyptian government has been asked to clarify its plans for the development of the Suez Canal Economic Zone (SCZone) as it seeks foreign investment to meet its ambitious investment goals for the area around the canal.
Several countries have already expressed interest in investing in the project but concerns have been raised over a perceived lack of detail around development plans and potentially difficult administration procedures and regulatory challenges.
India’s ambassador to Cairo, Sanjay Bhattacharyya, said that although it welcomes the opportunity to increase the estimated USD3 billion that Indian companies have invested in Egypt, they will require more specifics.
“We are very excited and positive after the opening of the new Suez Canal, and Indian companies have a very big interest to do more business in Egypt, but they want to know more details about the area from the master plan,” Bhattacharyya said at an event to celebrate technical and economic cooperation between India and Egypt held at the Indian Embassy in Cairo.
Egyptian president Abdel Fattah al-Sisi in August designated a 460.6 km² area around the Suez Canal a special economic zone. The designation provides for the establishment of an independent authority empowered to issue permits to investors in a ‘single-window’ manner, circumventing the usual bureaucratic hurdles.
The government said it anticipates investment in the SCZone of between USD68 billion and USD100 billion by 2023 and has launched an investment ‘road show’ to promote the project at conferences in Abu Dhabi, Barcelona, Beirut, Hamburg, Lisbon, Marseille, Milan, and Moscow before the end of the year.
Fayez Ezzeldin, chairman of the Canadian Chamber of Commerce in Egypt and the Middle East, expressed Canada’s interest in opportunities around the Suez Canal development goals, but warned that Egypt must deliver on commitments to ensure a proper regulatory structure and streamlined administration process.
The chamber was organising a large conference in Canada to look at investment in projects such as energy, logistics, and petrochemicals, Ezzeldin said.
China set up an industrial zone on the canal corridor in which it plans to establish 50 factories in the next three years.
“The Suez Canal project will not only benefit Egypt but will also meet China’s ambitious ‘One Belt, One Road’ initiative,” Chinese state media reported. “The Maritime Silk Road is an essential component of the ‘Belt and Road’ initiative. The new Suez Canal project, located in the centre of the route to the Middle East and Europe, will play an integrated role in the success of China’s initiative.”
China and Egypt this year signed investment memorandum of understandings in the energy and transportation sectors worth USD10 billion but the value of projects actually under way is thought to be less than USD1 billion.
Meanwhile, Cairo-based Arab Investment Bank (AIB) said it has allocated around USD128 million for development projects in the Suez Canal region. “AIB has allocated EGP1 billion (USD128 million) to finance the Suez Canal Region Development Projects in the coming period, EGP500 million for financing youth-led small and medium projects in the region, and the other EGP500 million for financing mega projects among banking alliances in energy, logistics, freight, discharging, and other sectors,” AIB chairman Hany Seif al-Nasr said.