The Coega Development Corporation on Tuesday inked a multi-million rand lease agreement with Chinese auto-maker First Automobile Works (FAW).
China's oldest and largest automobile manufacturer will invest an initial R600m in the first phase of the construction of a truck plant that is expected to have an annual capacity of 5000 units.
The CDC says R200m of the investment will go towards the construction of the "state-of- the-art truck and passenger car plant.
The car plant will form part of the second phase of FAW's investment and is expected to push total investment in the Coega IDZ to more than R1bn.
"The investment is jointly funded by the FAW and China-Africa fund and will, in the first phase, generate 500 permanent jobs for the Eastern Cape," the CDC said.
The CEO of the Coega Development Corporation, Pepi Selinga, says the investment by FAW is more than signficant and also a sign of things to come.
"FAW produces just about 2.5m cars per year which is four times the totality of all the cars produced in South Africa. That gives you the sense of the significance of this particular company, which is a Fortune 500 company," he said.
"Its a major confidence booster for the country. The minute you get one Chinese company its a signal to the rest of the other companies."
FAW chairperson Jin Yi, said his company's investment in Coega shows their confidence in South Africa and the Eastern Cape.
He says the truck plant, which will be situated in Zone 2 of the Coega Industrial Development Zone will be key for FAW's overseas production base.
Jin says trucks produced at Coega will be for the domestic market as well as for export into the rest of Africa.
Eastern Cape premier Noxolo Kiviet, who was one of a host of dignitaries at Tuesday's ceremony, said their will be major spin-offs for the region, not least of all the number of jobs the investment will create.
"Second opportunity is further investment in that you have to secure services like water and electricity which will provide an economic boost for the Nelson Mandela Bay Municipality," she said.
Kiviet also thanked president Jacob Zuma for putting the Eastern Cape at the centre of government's multi-billion rand infrastructure programme.
"In a few years time this province will look significantly different, with greater capacity to attract further investments," the premier said.
Meanwhile questions about the security of electricity supply were put to be bed by the CDC's business development manager, Gustav Meyer.
"At this point in time with the power supply available we will be able to supply the needs of FAW. They are not a major consumer of electricity, particularly in the first phase. When they enter into the second phase (producing small passenger cars) we will, with all the plans in place, be able to still supply all their needs," he said.
