Surbana Jurong to develop blueprint for Libyan Special Economic Zone

Photo credit: IFFM

Singapore-based urban and infrastructure consultancy, Surbana Jurong, has entered into an agreement to draft a master plan for the development of Misurata Free Zone (MFZ) in Libya.

Located 220km east of the capital Tripoli, the city of Misurata is recognised as the commercial hub of Libya. As the country's first free zone, the 2739 hectare MFZ is home to Libya's largest and busiest seaport, handling about 60% of the country's non-oil trade. It also serves as a centre for various industrial firms. Under the agreement Surbana Jurong will formulating a strategy to advance the development of the MFZ and the seaport. Its work will encompass identifying key industries and businesses that could be established in the MFZ.

Image credit: Ahmed Badry

Some 60 major investors currently operate in the zone. Asian firms active in the zone include the Chinese conglomerate Wangkang Group, which has launched a ceramic tile production subsidiary. Beijing-based China Harbour Engineering has also entered into a preliminary agreement to develop infrastructure in the MFZ, while China’s SANY will supply the port’s new container yard with 60-tonne gantry cranes. Toyota has set up its Libyan headquarters in the zone, from which it manages the distribution of vehicles and spare parts across the country. This also paves the way for companies in related sectors, like parts manufacturing, to set up shop in close proximity to the Japanese automotive giant.

Several Turkish companies have also shown interest in the MFZ. In 2021, representatives from Albayrak visited the MFZ with an eye to establish cold and dry storage as well as warehousing operation. Another Turkish entity, Yıldırım Group, has inked a memorandum of understanding (MoU) with the MFZ to explore opportunities in port traffic and development. European countries, too, are recognising the zone's potential. The Belgian Port of Antwerp has signed an MoU with the MFZ to promote trade and facilitate knowledge sharing, while delegations from Germany and the UK have visited the development in recent years.

The MFZ was established by government decree in 2000. The objective was to boost manufacturing, diversify the oil-dependent economy and provide employment. The zone currently creates almost 40000 direct or indirect jobs. The zone has a large land bank divided into 539 ha for site A and 2200 ha for site B, along with warehouses, site management buildings and other infrastructure. Other planned infrastructure includes a dedicated cargo airport on a 600-ha site and a 1500-ha industrial park, as well as a 5-hectare exhibition ground. MFZ Chairman Muhsin Sigutri says site A is ‘99% complete’. The autonomous MFZ authority owns and operates the largest seaport in the country. The 190-ha MFZ Port has 4400 metres of quay and a maximum berth depth of 14 metres. According to the Libyan Ports and Maritime Transport Authority the Port has been the busiest of the five Libyan ports – others being Tripoli, Alkhums, Tobruk and Benghazi. The MFZ authority enjoys wide autonomy and foreign investors can avail of a single-window clearance scheme and 100% exemption from tax and customs duties. Preferred sector includes logistics, construction, insurance, financial services and basic manufacturing.

Few places in Libya are as attractive for investors as MFZ. The challenge for the MFZ authority how to counter negative perception about security. Since the overthrow and death of Muammar Gaddafi in 2011, Libya has experienced significant instability. The country has been in a state of civil war, with zones controlled by armed militias and allied to two rival governments - one in the east and the other in the west. The UN-recognised Government of National Unity (GNU) is based in Tripoli in the west, while its rival, the House of Representatives, operates from Tobruk in the east. Both are backed by various local militias and international allies.

Despite years of conflict, the security situation has improved considerably. Misurata itself is free of any incidents of violence and remains a safe for expatriates and investors. In recent years, Libya has seen significant progress in the private sector and broader economy. The national GDP is expected to grow by 7.5% and 6.9% in 2024 and 2025, respectively, supported by a recovery in the oil sector, which has benefited from high crude prices following the conflict in Ukraine. With a population of just 7m, Libya boasts Africa's largest proven oil reserves, estimated at 48bn barrels.

 

References

‘Misurata Free Zone – Focus Report: Economic Recovery’, Oxford Business Group, June 2022

‘Can oil money and fancy shopping malls finally unite Libya?’, Deutsche Welle,  25 May 2023

‘Libya country profile’, BBC, 13 September 2023

‘Misrata Free Zone signs consultancy agreement with Singapore’s Surbana Jurong’, Libya Herald, 06 October 2023

‘China’s Goodwill to establish ceramics/porcelain factory in Misrata Industrial Zone’, Libya Herald, 06 October 2023

‘Muhsen Sigutri, Chairman, Misurata Free Zone (MFZ)’, Oxford Business Group, October 2023

‘China Harbour to help turn Libyan city into gateway to Africa’, Global Construction Review, 22 November 2023

‘Misrata Free Zone signs agreement with Chinese company SANY to supply gantry cranes’, Libya Herald, 23 November 2023

‘Misrata Free Zone signs MoU with Antwerp port’, Libya Herald, 30 November 2023

‘Singaporean Surbana Jurong starts implementing its consultancy contract with Misrata Free Zone’, The Libya Herald, 11 March 2024

‘Libya’, OPEC, Accessed 27 March 2024

‘World Economic Outlook database: October 2023’, International Monetary Fund, Accessed 27 March 2024

LinkedIn post, Misurata Port & Free Zone, March 2024