Egyptian banks plan to invest in growing strategic crops in the Nile basin countries including Ethiopia.

Banque Misr SAE and the Export Development Bank of Egypt are among banks that will take part in this project.

The state-owned bank, The National Bank of Egypt, plans to invest about $40 million to grow strategic crops such as corn and wheat in Ethiopia for export to Egypt.

The bank will also give six Ethiopian banks, about 80 million Egyptian pounds ($14.6 million) credit facilities to fund foreign trade to countries including Egypt and other Nile basin countries.

Egypt announced preparations to invest on 20,000 hectares of land of agricultural products as from 2010, in the Afar regional state of Ethiopia, with a multi-million dollar investment.

The Nile River resource has been a bone of contention between Egypt and Ethiopia for over a decade. With this step, the two countries, have agreed to strengthen their economic collaborations and to enhance their overall relations in a backdrop of a longstanding disagreement over the Nile’s water resources.

For over a decade now, the ten African riparian countries of the Nile River, Uganda, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, Burundi and Eritrea that share the river’s water resources have been involved in numerous rounds of negotiations within the framework of the Nile Basin Initiative and pushing for a permanent body that would allow for equitable water use.