Libya has signed a strategic partnership with international firms to expand and develop the Misurata Free Zone, a project the government says will attract about $2.7bn in foreign investment and help diversify the country’s oil-dependent economy.

Prime Minister Abdulhamid Dbeibah announced the agreements on Sunday, saying the expanded zone could generate operating revenues of around $500m a year.

“This project not only enhances Libya’s position among the region’s largest ports in terms of size and capacity, but it also relies on direct foreign investment within a comprehensive international partnership,” Dbeibah said in a post on X.

The Misurata Free Zone signed the deal with Terminal Investment Limited, which is expected to help turn the port into a competitive logistics hub linking Africa, Europe and the Middle East.

Libya has faced prolonged instability since the 2011 NATO-backed uprising, with rival administrations emerging in the east and west in 2014, complicating efforts to rebuild state institutions and revive the economy.