The agreement, involving the construction of a nuclear-powered plant to purify sea water for drinking purposes, was signed in Tripoli on Wednesday (25 July), one day after the medics were released in a joint diplomatic effort between Paris and the European Commission.

Sarkozy indicated that the agreement still needed to be finalised “in the coming months or years” so that French group Areva could start construction of the facility.

The move marks the beginning of the “normalisation” of relations between Europe and Libya announced by Commission President José Manuel Barroso after the release of the medics on Tuesday (24 July) and formally put down in a detailed memorandum signed by Libya and the EU.

The French president added that a second project involved exploration for uranium reserves, in co-operation with Libya. “We found some in Niger. The geological context is the same. Areva needs uranium,” Sarkozy was quoted as saying by Le Monde newspaper.

Libya is also home to the largest oil reserves in Africa, ahead of Nigeria, and has large amounts of natural gas, but exports have so far been thwarted due to the country’s international pariah status. It now hopes to double its oil production by 2012, with European countries among its main clients.

Other agreements signed during Sarkozy’s visit included military, science and education as well as cultural agreements. The French president also took the opportunity to defend his idea of a Mediterranean Union, which, he said, raised “great interest” from Libyan leader Muammar Gaddafi.

Other countries, including the UK and the US, are also lining up to visit Libya in the near future.