(Yicai Global) Jan. 17 -- A Chinese  state-owned lender will give a loan to Egypt's government agency to  build the northeastern African country's first electric light rail  transit system.

The Export-Import Bank of China and the  National Authority for Tunnels of Egypt penned a USD1.2 billion loan  agreement regarding the light rail project in the latter's capital city,  state-backed Xinhua News Agency reported.

The project is expected to alleviate congestion in Cairo, Hisham Arafat, the minister of transport, told Xinhua. 

The new route will connect Cairo with its  major satellite city Al Ashir min Ramadan and a planned new capital.  The light rail link is expected to be about 66 kilometers long and  transport 350,000 passengers each day. Trains on the route will run as  fast as 120 kilometers per hour.

China and Egypt inked a framework  agreement for the project in 2014. A consortium formed by China Railway  Engineering and China Aviation International Holdings signed a CNY1.2  billion (USD177.4 million) contract with the NAT in 2017 regarding the  same project.

Editor: Emmi Laine