Saudi Arabia pairs a defense pact with USD 403 mn in loans for Syria

Saudi Arabia deepens its role in Syria with defense agreements: Syria and Saudi Arabia signed a defense cooperation agreement in Riyadh on Wednesday, with Syria’s Foreign Ministry calling it the most notable of the agreements struck during President Ahmed Al Sharaa’s second visit to the city in under a month. Syria is also in talks to join the Makkah Defense Pact with Turkey and Pakistan, Foreign Minister Asaad Al Shaibani said previously.

Defense, with a side of money: The two countries also signed several financing agreements that will go towards the Syrian state’s operating capacity, with the Saudi Fund for Development providing more than USD 403 mn in concessional loans. These include USD 105 mn to strengthen civil defense, USD 100 mn to rebuild and equip damaged healthcare facilities, USD 90 mn to rehabilitate the Aleppo thermal power plant, USD 60 mn to repair damaged housing, and USD 30 mn for drinking water systems in Damascus and Idlib. Syrian Industry Minister Basel Abd Al Hanan and Saudi Industry and Mineral Resources Minister Prince Abdulaziz bin Salman signed an industrial cooperation agreement covering industrial city infrastructure, supply chains, investment and workforce training, with further memoranda on agriculture and environmental protection.

The Kingdom has taken the lead in Syria’s reconstruction and economic reintegration from the outset. Saudi investors now hold control through several distinct vehicles: STC holds a majority equity stake, flynas operates a minority joint venture, Riyadh Cables retains operating rights over a key Syrian industrial asset, and Al Harfi has secured contracted electricity sales for up to 25 years.

While Saudi Arabia has capital deployed across most layers of Syria’s rebuild without an obvious framework linking them together, John Calabrese, an assistant professor at American University in Washington, D.C., sees a broader strategy emerging in how the deals are bundled and sequenced. “The clearest evidence is the bundling of agreements across sectors and the focus on the grid and technical capacity,” Calabrese told our infrastructure desk. Still, he cautions that these efforts may not translate into fully coordinated infrastructure: “It is possible that this is a one-off, the exception rather than the rule.”