Mumbai: Bahrain-based Islamic investment bank Gulf Finance House (GFH) has signed a memorandum of understanding (MoU) with the Maharashtra government to set up a $10 billion special economic zone (SEZ) near Panvel, along the Mumbai-Pune Expressway.

The single largest foreign direct investment (FDI) deal signed by the state government so far, the SEZ will have an energy city, a software and telecom city and an entertainment city.

State industry secretary V K Jairath and GFH's acting CEO Peter Panayiotou signed the MoU.

The zone, proposed to be located in an area of 1,600 acres alongside the Mumbai-Pune expressway, will also include a hub for the oil and gas industry in Maharashtra, Gulf Finance House said in a statement.

"The opportunities that India offers within infrastructure and its allied sectors such as energy, software and telecommunications, are tremendous," Esam Janahi, chairman of Gulf Finance House, said in the statement.

"Last year, we signed an MoU with the state government to set up SEZ which featured only an energy city but as the proposal evoked a tremendous response, we decided to explore possibilities of expanding the scope of the SEZ and found that investors from all over the world were interested in investing in IT & ITES, telecom and entertainment, which are the booming sectors of India's economy," Panayiotou said.

GFH has raised $630 million via private placement for the first phase of development and expects to mop up another $700 million in the next six months. "GFH will spend between $2 and $2.5 billion for buying land and development of infrastructure at the SEZ and another $3 billion for constructing buildings and other facilities", said Panayiotou.