Egypt's Suez Canal Economic Zone Investments

By Aidan Lewis and Patrick Werr

CAIRO (Reuters) – Egypt's Suez Canal Economic Zone (SCEZ) has invested $3 billion in infrastructure in recent years, with plans for a similar investment soon to attract investors, its chairman said.

The zone consists of six ports and four industrial areas adjacent to the canal, benefiting from special legal and tax advantages due to the global shipping traffic.

Despite being government-run, it operates separately from the canal. Attacks on Red Sea shipping by Yemen's Houthis have diverted traffic from the canal, resulting in a nearly $3 billion revenue decline in the first half of 2024, dropping to $1.83 billion.

Political instability in the region has underscored the need for diversification, according to Gamal El-Dein, noting an uptick in new projects over the last 24 months.

"We have attracted over $6.3 billion in various sectors, including logistics and ports, with 164 projects—seven in our ports and the rest in factories and logistics sites," he said, expecting numbers to increase sharply.

This fiscal year has seen close to $1 billion attracted in just four months, he added.

New Container Berths

Recent developments include the East Port Said container port, which is near operational, featuring a general cargo terminal and a roll-on, roll-off car terminal expected by January. The terminal for containers is set to open in April.

Currently, 2.4 km of container berths are operational, with discussions ongoing for an additional 1 km, according to Gamal El-Dein.

More private investors are sought to support the new infrastructure as the zone recorded over 160 projects in the last two years.

"We realized the necessity to further invest in infrastructure for future projects," he added, noting a growth of almost 50% in the number of companies from around 300 to over 450 in two years.

An example of this growth is in desalination projects. The zone currently has one plant at Sokhna on the Red Sea and is developing another for the green hydrogen industry, with a first phase expected to provide around 250,000 cubic meters of water daily. The tender will be announced soon, with construction anticipated to take 2-4 years.

The SCEZ is positioning itself as a hub for green fuels such as green hydrogen, green ammonia, and green methanol, having signed 15 framework agreements and eight memoranda of understanding for potential projects.