Egyptian and Spanish partners are investing almost $250 million to build an industrial zone in Egypt to attract investment from Europe despite a world financial downturn, an official said on Monday.
Pyramids Industrial Parks, a private Egyptian firm, and Spain’s Consorci de la Zona Franca de Barcelona will launch the project on Tuesday, the official from the Egypt’s Ministry of Trade and Industry said.
‘With the world economic crisis right now, this is a very good vote of confidence in Egypt,’ the official said, adding that the project would involve investment of 1.4 billion Egyptian pounds ($248 million) over five years.
A memorandum of understanding to set up the zone was signed in 2008.
Simon Kitchen, vice president for research and economics at investment bank EFG-Hermes, said it was a positive signal amid the financial crisis but said the impact would be long term.
‘It is money coming in — in particular at a difficult time — but I expect we will feel the impact of this over five to 10 years rather than immediately,’ he said.
Egypt used to promote free trade zones that offered tax breaks and other benefits, but Kitchen said it was now trying to attract investors without such breaks but with a low corporate tax rate of 20 percent, reduced bureaucracy and improved infrastructure.