Emirates Telecommunications Corp (Etisalat) is holding talks with SudaTel to raise its stake from 12 per cent and become the second-largest investor in the telecommunications service provider, Sudanese officials said.

"Discussions are currently under way," Deputy Consul-General Yousuf Kurdafani said during a press conference on the Investment Opportunities and Development of Transport Services forum to be held in Sudan on June 5-6.

He said the growth potential is enormous, considering that Sudan is the largest country in the Arab world and has access to eight neighbouring countries, representing a market of 300 million people.

"Realising the potential - and the growth opportunities afforded by the discovery of oil - several other UAE investors have set up projects in Sudan," Consul-General Ahmed Shawer said. They include a Dh80 million sugar project and a property development venture.

UAE-Sudan trade grew 39 per cent to Dh600 million last year. Foreign investment in five years since oil was struck totals $3.2 billion, including significant Arab investment in agriculture and oil.

Investors from Malaysia, China, Canada, India, Pakistan and Turkey have capitalised on Sudan's potential in agriculture, mining and manufacturing, he said. "We offer a package of incentives including exemption from corporate tax, facilities for capital, and profit repatriation."