Egypt's government has announced plans to build a new capital adjacent to Cairo, in a massive new project that in its first phase would cost $45bn and take up to seven years to complete.

Housing Minister Mostafa Madbouly announced the plan on Friday at the opening of the three-day international economic conference held in Sharm el-Sheikh and attended by hundreds of business executives and world leaders.

Analysis: Egypt at a discount? The opening of Egypt's economic conference has gone rather well for President Sisi. But will the meeting in Sharm el-Sheikh also prove helpful for Egypt and everyday Egyptians? The general-cum-president has been trying to gain international legitimacy ever since his coup d'état in the summer of 2013. On Friday he received a huge push. The attendance of two dozen heads of states, tens of officials and over 2,000 investors is de facto recognition of the Sisi regime by the international community. Click here to read the full analysis by Marwan Bishara, Al Jazeera's senior political analyst

The aim, he said, is to alleviate congestion and overpopulation in Cairo over the next 40 years. By that time, Cairo - currently home to about 18 million - would have doubled in size.

The first phase of the ambitious programme, Madbouly said, is an expansion of the current outskirts of the capital to the east, adding an additional 105km of development.

The area would be a new administrative centre including government offices, diplomatic missions and housing as well as universities, a technology and innovation park, and 10,000km of roads. Madbouly did not say what the new administrative centre would be named.

Overall costs for the new city were not revealed, nor were details on how it would all be funded.

The military has already begun constructing the road linking Cairo to the new planned administrative heart of the capital, Madbouly said.

Eventually the new capital would expand to 700 square kilometres in size, much of it green spaces, linking up with the Suez Canal zone, the minister said, calling the project a source of "pride and inspiration" to young Egyptians. It would house up to five million people in 25 residential districts.

The plan is the latest massive project planned by the government, headed by President Abdel-Fattah el-Sissi, who was elected in June last year. The government is also planning the expansion of the Suez Canal and the creation of an industrial zone around it.

The conference in Sharm el-Sheikh aims to attract billions of dollars into Egypt's economy, and on Friday, Saudi Arabia, Kuwait and the United Arab Emirates pledged to offer $12bn as investment aid to the country.