Saudi Arabia is planning a multi-bn-USD reconstruction drive for Syria: Major Saudi companies, including Acwa Power and telecom operator STC, plan to “drive bns of USD of actual capital to Syria within the next five years,” to rebuild Syria’s energy, financial, and telecom sectors, Saudi-Syrian Business Council CEO Abdullah Mando told Reuters on the sidelines of the Future Investment Initiative (FII9) in Riyadh last week.

Investment-led recovery: Syria’s focus is on “reconstruction through investment” rather than aid, Syrian President Ahmed Al Sharaa addressed attendees during the Forum. The country is a trade corridor and has already attracted around USD 28 bn in pledged investments in the first half of the year, nearly USD 7 bn of which was from Saudi companies, state news agency SPA reports Al Sharaa saying. The country has reformed its investment laws to favor investors and enable capital repatriation, with the framework ranked among the world’s top ten, he said.

IN CONTEXT- The World Bank (WB) estimates Syria’s reconstruction needs at USD 216 bn after 14 years of civil war, according to a report (pdf) released last month. The cost, however, could even be much higher, with the WB saying the estimate is a rapid assessment that doesn’t necessarily cover the full impact of the war. The report surveyed the damage in residential buildings (USD 32.7 bn), non-residential buildings (USD 23.4 bn), and infrastructure (USD 52 bn), and has put the cost of reconstruction for infrastructure alone at some USD 81.7 bn.

Sharaa spotlighted investment prospects in real estate, tourism, agriculture, and energy, noting that Syria’s reconstruction needs have opened many windows for foreign investors. The country also holds significant gas reserves.

REMEMBER- Some USD 6.4 bn in agreements were activated during a joint investment roundtable in Damascus last week, focused on exploring new potential investments in priority sectors, including energy, communications, banking, real estate development, mining, and digital transformation. This, built on a July Saudi-Syrian Investment Forum in Damascus, produced 47 agreements worth over SAR 24 bn (USD 6.4 bn), with the real estate sector securing over SAR 7.2 bn.

Getting over the sanctions hump: Despite strong investor interest in Syria thus far, US Caesar sanctions are currently blocking some capital flows, leaving actual spending at “zero,” Mando said. The US lifted the last of its direct sanctions on Syria back in August, but some secondary sanctions — courtesy of the Caesar Act — are still in place, and would require a US Congress vote to officially repeal them. The Caesar sanctions were first introduced in 2019 to target entities and individuals providing material support to the Assad government.

Tags: