$7.5 billion! 85% financing support! china and egypt sign non-binding framework agreement!

This agreement represents a breakthrough in the cooperation model: the Chinese side is not only undertaking the engineering, procurement, and construction (EPC) contract, but also committing to provide 85% of the financing support (an increase from 33% in the April agreement), and may directly participate in equity investment. This marks an upgrade in China-Egypt cooperation from traditional engineering contracting to an integrated model of investment, construction, and operation. Previously, in April 2025, Egyptian Prime Minister Mostafa Madbouly witnessed the signing of the basic design contract for the first phase of the project. Participants included CNCEC, Egypt’s ENPPI, and Petrojet, laying the foundation for full-scale commencement in 2026.

The industrial upgrading demands of Egypt's "Vision 2030"

According to Al-Ahram, the Red Sea Petrochemical Complex covers an area of 5 million square meters and has completed its basic construction. It has signed a crude oil supply agreement with the Egyptian General Petroleum Corporation (EGPC) and Saudi Aramco. Additionally, logistics agreements with the Arab Petroleum Pipelines Company (SUMED) and Sonker Fuel Supply Company (Sonker) ensure the transportation and distribution of products. These collaborations have laid a solid foundation for the project's implementation.

The Egyptian government stated that the project is highly aligned with the "Vision 2030," aiming to promote sustainable economic development by localizing production, maximizing value-added output, attracting global investors, and reducing the carbon footprint of the petrochemical industry. The complex is expected to significantly increase Egypt's self-sufficiency in petrochemical products, reduce reliance on imports, and enhance export capacity through international distribution networks.

China's Belt and Road Initiative's Overseas Expansion

This project is a key milestone for Chinese chemical enterprises to expand into the overseas high-end market. China National Chemical Engineering Group Corporation (CNCEC), leveraging its full lifecycle service capabilities (design, construction, and operation & maintenance) and advantages in green chemical technology, has become Egypt's preferred partner. The project aligns with the high-quality co-construction standards of China’s Belt and Road Initiative, and through technology export and capacity cooperation, it helps Chinese enterprises enhance their brand influence in the global petrochemical engineering general contracting sector.

The geographical advantages of the Suez Canal Economic Zone (SCZONE)
The project is located in the Suez Canal Economic Zone, only 10 kilometers from Sokhna Port, with a strategic position that reaches the European, Asian, and African markets. The SCZONE offers tax incentives, land policies, and one-stop administrative services to provide strong support for the project's implementation. Furthermore, the Egyptian government has specified investment incentive measures through the "Cooperation Plan" to attract foreign investment.

The Red Sea Petrochemical Complex is not only a milestone in Egypt’s petrochemical industry but also a model of China-Egypt cooperation.

China Daily pointed out that China National Chemical Engineering Co., Ltd., with its rich experience in the petrochemical engineering field, has provided advanced technical support for the project, further deepening China-Egypt cooperation under the framework of the Belt and Road Initiative.

According to Reuters, the total investment for the project amounts to $7.5 billion. The completion of the preliminary design phase will provide more accurate cost estimates, which are crucial for achieving financial closure and attracting financing. The Egyptian State Information Service (SIS) stated that construction is expected to commence in 2026, followed by commercial operations.

The project will create a large number of job opportunities, promoting the Suez Canal Economic Zone as a global petrochemical industry hub. According to an analysis by the Financial Times, the implementation of the project will boost the confidence of investors and financial institutions, providing financial security for subsequent construction phases, while enhancing Egypt's competitiveness in the global petrochemical market.

The Red Sea Petrochemical Complex has excelled in environmental protection. According to the Egypt Independent, the project employs energy-saving technologies and environmentally friendly processes to reduce carbon emissions by optimizing energy use, in line with Egypt's emission reduction commitments under the United Nations Framework Convention on Climate Change (COP27). The advanced steam cracking unit not only enhances production efficiency but also significantly reduces environmental impact.

Minister Karim Badawi stated that the complex will set a green benchmark for Egypt's petrochemical industry, promoting the industry's development towards a more sustainable direction. Localized production further reduces transportation-related carbon emissions, helping Egypt achieve its sustainable development strategic goals.

The advancement of the Red Sea Petrochemical Complex highlights Egypt's ambition in industrial modernization and green development. The initiation of the preliminary design phase lays the foundation for subsequent construction and is expected to attract more international investment. The Egyptian government hopes to consolidate the strategic position of the Suez Canal Economic Zone through this project, making it a regional hub for the global petrochemical industry.

Industry experts believe that the successful implementation of the project will provide a model of green technology and industrial localization for the petrochemical industry in the Middle East and North Africa. In the future, with the commencement of commercial operations, the Red Sea Petrochemical Complex is expected to become a new engine for economic growth in Egypt, deepen China-Egypt economic cooperation, and inject new vitality into regional economic development.