Egypt has proposed allotting a million square meters of land for the industrial zone 30 kilometers west of the Mediterranean port of Alexandria. The land will house projects in car and aircraft production and the manufacture of equipment for power-generating plants and the oil industry.

Egypt is also interested in opening enterprises to manufacture computers, sea-water desalting plants and medical equipment.

"This [the memorandum] is a good instrument which I hope will be used by Russian investors," Russian Minister of Industry and Energy Viktor Khristenko said in Cairo after signing the document with Egypt's minister of foreign trade and industry, Rachid Mohamed Rachid.

The Egyptian minister said his country welcomed Russian investment. "We approve of foreign investment [to our country], particularly from Russia," he said.

His ministry's press service said Russia's extensive technological base would be used in joint heavy industrial projects to meet the demands of the Egyptian market, with a significant part of the products intended for export to neighboring countries.

Egypt is one of Russia's largest economic partners in the Middle East and Africa. Bilateral trade was $1.95 billion in 2006, with the share of goods being $1.2 billion.

A number of Russian companies are participating in the reconstruction of facilities built in Egypt with the assistance of the Soviet Union, including a hydro-electric plant at the Aswan High Dam and integrated iron and steel works in Helwan.

Russian Lada cars have been assembled near Cairo since 2002.