Saudi billions poised for Syria but US sanctions remain a barrier

Among the companies looking to break into the market are Saudi renewable energy major ACWA Power and state telecoms firm STC, said Abdullah Mando, CEO of the new Saudi-Syrian Business Council. The plan is to start with the basics in Syria's war-torn economy by rebuilding energy, financial and telecoms infrastructure, he said.

"The goal is to drive ... billions of dollars of actual capital to Syria within the next five years," he told Reuters in Riyadh this week, at the Future Investment Initiative conference that brings together global political and business leaders.

ACWA Power and STC did not respond to requests for comment.

TOUGHEST SANCTIONS REMAIN IN PLACE

Riyadh has been a main engine driving global re-engagement with Syria since rebels toppled former strongman Bashar al-Assad last year, pulling Damascus out of arch-foe Iran's orbit and reshaping the Middle East's geopolitical map.

In May, the kingdom hosted a historic meeting between U.S. President Donald Trump and new Syrian President Ahmed Sharaa, where Trump announced he would lift all Syria sanctions.

Despite widespread exemptions, the toughest measures - known as the Caesar sanctions - require a repeal from the U.S. Congress, with lawmakers remaining divided on the matter but expected to make a decision before the end of the year.

Caesar is "the final chokehold on the Syrian economy," Mando said. "There could still be significant investment, but the movement of capital is difficult," he said.

The White House and U.S. State Department did not immediately respond to requests for comment, nor did Syria's information ministry.

BILLION-DOLLAR DEALS

The World Bank has estimated Syria's reconstruction costs at $216 billion after nearly 14 years of conflict that left swathes of the country in ruins.

Saudi Arabia announced more than $6 billion in investments for Syria in July, including $2.93 billion for real estate and infrastructure projects and about $1.07 billion for the telecommunications and information technology sector.

This week, Diriyah, a Saudi gigaproject focused on developing a Riyadh historic site as a real estate and tourism destination, held discussions with Syrian officials about contributing to the reconstruction of historic sites in Syria.

Saudi money may also soon flow to Syria's civil aviation, education and medical sectors, Saudi and Syrian businessmen said, and Riyadh is in talks with Damascus about establishing a rail link via Jordan.

Syria has signed memorandums of understanding with Qatari and Emirati firms, among others, for energy and infrastructure projects, though Syrian officials say little actual money has come through due to sanctions and the country's crippled financial sector.

Saudi and Syrian officials say they are confident Caesar will be repealed and are preparing for that eventuality.

"There is significant available (capital) and spend, I think, is zero," said Mando, one of 60 Saudi businessmen on the Saudi-Syrian Business Council, many of them originally Syrian.

VISION 2030

For Riyadh, the bet on Syria is tied to geopolitics but also in line with MBS's Vision 2030 to diversify the kingdom's economy away from oil, analysts say.

"This approach aligns squarely with Vision 2030's broader purpose which is not just about domestic transformation but also transforming Saudi Arabia into a hub of regional and global connectivity," said Adel Hamaizia, managing director of Highbridge Advisory.

"It's a recognition that the Kingdom's own diversification ambitions and prosperity are inseparable from the stability and reintegration of its neighbourhood," he said.

Even with the world's top moneymakers and managers in attendance, Saudi Crown Prince Mohammed bin Salman gave Riyadh-born Sharaa the stage at FII's coveted final slot on Wednesday.

It was a dramatic turn for the one-time Al Qaeda commander, who less than a year ago fought on the battlefields of Syria and is now meeting with global figures - including FIFA President Gianni Infantino - and taking selfies with admirers as he strolled through the FII conference hall on Tuesday evening.

"We chose the path of reconstruction through investment," Sharaa told attendees. "We did not choose the path of rebuilding Syria through aid and assistance."