CAIRO, July 18 (Xinhua) -- Egypt signed on Wednesday an agreement to establish a power plant to generate wind power at a capacity of 500 megawatts in the Gulf of Suez.

The agreement was signed between the Egyptian Ministry of Electricity and Renewable Energy and representatives from companies including Orascom Construction, Engie, and Toyota Tsusho Corporation.

Following the inking ceremony, Electricity Minister Mohamed Shaker said that the estimated costs of the project amounted to 650 million U.S. dollars, adding that it is expected to contribute to producing about two billion kilowatts of energy annually, according to official MENA news agency.

The project is also expected to save fuel and contribute to bringing down the emission of carbon dioxide, the minister said.

It comes within the framework of the state's efforts to diversify electricity energy resources and make use of Egypt's natural resources, he said.

"This includes increasing the use of renewable energy to over 37 percent by 2035," the minister said.