The plant would also provide nuclear fuel to the region.
"We have proposed a solution, which is to create a consortium for all users of enriched uranium in the Middle East", al-Faisal said on Thursday.
Al-Faisal said the project would mean Tehran could continue developing nuclear energy while decreasing fears that their plans are a cover for an atomic weapons programme.
"America says Iran getting a nuclear weapon could cause WW3 but I think it's more likely that America would cause WW3 by invading Iran"
Jack, Bangor, UK
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"[We will] do it in a collective manner through a consortium that will distribute according to needs, give each plant its own necessary amount, and ensure no use of this enriched uranium for atomic weapons", al-Faisal said.
"We believe it should be in a neutral country Switzerland, for instance".
"Any plant in the Middle East that needs enriched uranium would get its quota", he said.
Al-Faisal said he belived the US would support the proposal.
"The US is not involved, but I don't think it [would be] hostile to this, and it would resolve a main area of tension between the West and Iran."
He added that Iran was considering the offer.
"We hope the Iranians will accept this proposal. We continue to talk to them and urge them not only to look at the issue from the perspective of the needs of Iran for energy, but also in the interests of the security of the region," he said.
The six GCC states and Algeria, Egypt, Jordan, Libya and Yemen have all said they want to pursue peaceful nuclear projects.