Damascus- Syria is seeking to rehabilitate its energy sector through a $7 billion agreement signed by the government late last month with a consortium of international companies that includes American, Qatari and Turkish companies, in a move that will reshape the economic, political and social landscape in Syria.
The memorandum of understanding, which was attended by Syrian President Ahmad al-Sharaa and US special envoy Thomas Barak to generate an additional 5,000 megawatts of electricity, including 4,000 megawatts through modern gas plants and 1,000 megawatts from solar energy.
The agreement, which was signed following the lifting of US and European sanctions, is of exceptional importance as it not only represents a huge economic investment, but also reflects a shift in the international approach to the Syrian file and opens new prospects for reconstruction and stabilization in the country.
The economic impact of the energy agreement
The economic impact of the Syrian energy agreement is concentrated in several key areas:
- Reducing the burden on the budget
Syria has relied excessively on fossil fuels to produce electricity, a major cause of the depletion of a large portion of the cash reserves while the proposed projects based on gas and solar renewable energy to produce electricity would significantly reduce the import bill, according to the specialized energy platform Washington.
Adopting gas instead of fuel is an economically feasible step, as gas is cheaper, allowing financial resources to be directed towards other priority sectors.
Electricity has a multiplier effect on the productive sectors, because its stable and continuous availability will reduce production costs in the industrial, agricultural and service sectors, thus enhancing the competitiveness of Syrian products locally and abroad, according to a study published in the Journal of Finance and Development, titled “Gross Domestic Product (GDP): Everything in Economics”.
The study also notes that every 10% increase in electricity supply can lead to a 1.5% to 2.5% increase in GDP in developing economies.
The agreement is expected to create widespread employment opportunities, with official estimates indicating that 50,000 direct and 250,000 indirect jobs could be created as a result of the expected economic activity in the near future.
- Investment promotion
Syria has signed memorandums of understanding of this magnitude, and with companies from regional and international countries such as Turkey and Qatar and the United States will boost investor confidence in the current reality in Syria.
The success of this agreement is expected to encourage other investors to enter the Syrian market, creating a positive cycle of growth and investment.
- Accelerating the reconstruction process
Reforming Syria’s electricity sector could accelerate the reconstruction process, as the availability of electricity is a prerequisite for rehabilitating damaged areas and restarting stalled industrial facilities, according to a World Bank report titled “Syrian Economic Outlook, Challenges and Opportunities for Reconstruction.”
The development of energy infrastructure will also contribute to strengthening regional connectivity. Syria can become a regional hub for energy exchange with neighboring countries, which will enhance Syria’s geo-economic position and open new horizons for regional economic cooperation.
Political gains
The energy agreement signed by Syria with a consortium of American, Qatari and Turkish companies goes beyond its economic dimensions to constitute a political event with deep implications. In a country torn apart by years of conflict and international isolation, this agreement marks the beginning of a new phase of openness and international cooperation, and carries with it multifaceted political repercussions.
On the domestic front, Basil Haffar, director of the Edraak Center for Political Studies and Consulting, says that the agreement represents a strong support for the president Ahmed al-Sharaa and the government, strengthening their legitimacy in the face of the current political and security challenges.
Al-Haffar emphasizes that the government’s success in concluding an agreement of this magnitude with influential international and regional powers gives it additional political momentum and enhances its ability to negotiate with other internal parties within the framework of the national reconciliation and democratic transition process.
Al-Haffar notes that the signing of the agreement in the presence of US special envoy Thomas Barak represents an implicit US recognition of the government’s legitimacy and signals a shift in US policy towards Syria, from a focus on sanctions and pressure to constructive engagement and support for reconstruction and stability.
The shift in the US position encourages other countries to re-evaluate their relations with Syria and provide the necessary support for the political transition.
Al-Haffar emphasizes the need to take security challenges into account when implementing the agreement on the ground, especially in light of the persistence of some pockets of security tension in eastern and southern Syria and the disarmament and reintegration process.
Social stability
In a society that has suffered the ravages of war and division, projects of this scale can be a factor of social cohesion.
The expected positive social repercussions of the agreement are expected to improve the quality of life for Syrian citizens, as the provision of stable and continuous electricity will have a positive impact on various aspects of daily life, as well as improving education and health services.
This tangible improvement in basic services will contribute to enhancing citizens’ sense of belonging to the state and society.
The creation of 50,000 direct and 250,000 indirect jobs will contribute to alleviating the unemployment which is one of the most prominent social issues in Syria, and this will lead to improved income levels for Syrian families and reduce poverty rates.
New approach
The energy agreement that Syria signed with a consortium of American, Qatari and Turkish companies represents a pivotal turning point in Syria’s energy strategy and the beginning of a new approach to the country’s energy security.
Syria has an opportunity to re-establish a new approach to energy security:
- Diversifying sources of electricity production, under the agreement to build a 1,000-megawatt solar power plant in the Rabie valleys in southern Syria. This plant is the largest of its kind in Syria and will contribute significantly to increasing the share of renewable energy in the Syrian energy mix.
- Regional electricity interconnection: The agreement opens up new prospects for electricity interconnection with neighboring countries, especially with Turkey, which will export to Syria 400 kW through the five-year line after its rehabilitation, in addition to the expected connection with the Jordan and Saudi Arabia.
- Modernizing heating systems in new buildings and switching from diesel to natural gas.
- Formulating laws and procedures to regulate the institutional work of the energy sector by modernizing legislation, building the capacity of national cadres, and promoting research and development in the field of energy.
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2025-06-03 06:17:00
