Egyptian and Chinese companies signed a memorandum of understanding on Wednesday to develop a massive 10-gigawatt solar energy project, aiming to boost renewable energy capacity and reduce reliance on fossil fuels in the most populous Arab country.

The deal, witnessed by Egyptian Prime Minister Mostafa Madbouly, was signed by Egypt's New and Renewable Energy Authority, the Egyptian Electricity Holding Company, and China Electric Power Equipment & Technology Co., Ltd.

"The deal is part of a strategy to increase the capacity of renewable energy and limit the use of fossil fuels in line with the state's sustainable development plan," the Egyptian cabinet said in a statement.

The project, upon completion, is estimated to generate 29,784 gigawatt-hours (GWh) of clean energy annually, reducing carbon dioxide emissions by 14 million tonnes.

The statement added that the project is part of Egypt's Green Corridor initiative, a grid dedicated to renewable energy projects, and will save 1 billion U.S. dollars in annual costs of natural gas upon completion.

"Egypt adopts an ambitious program for upgrading the electricity sector in different fields, including the maximization of renewable energy use and encouraging the foreign and local private sector investments," said Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker on the sidelines of the signing ceremony.

He emphasized Egypt's goal of increasing electricity generation from renewable sources to 42 percent by 2030. Shaker also praised the project as a symbol of the "strong and productive cooperation" between Egypt and China.