Turkish companies expect more opportunities to support $500bn Syria reconstruction

Companies from banks to port operators and energy companies are lining up to grab their share of business opportunities arising out of Syria’s $500 billion reconstruction effort as the war-torn country opens up its economy.

Turkey’s Deniz Bank, which is fully owned by Emirates NBD, expects more financing opportunities to support Syria’s reconstruction, while the port operator DP World plans to ship more cargo out of Turkey to Syria.

Turkish conglomerate Kalyon Holding also expects more deals in Syria after signing a $7 billion energy investment agreement to build power plants in the country on Thursday. US and Qatar-based companies are also part of this consortium.

As part of the agreement, natural gas power plants with a total installed capacity of 4,000 megawatts and a solar power plant with an installed capacity of 1,000 megawatts will be built in Syria.

“Despite security challenges, the international community's commitment is strong in Syria, with support from the EU and the US,” Kalyon Enerji chief executive Murtaza Ata said in Istanbul.

Kalyon Enerji is a unit of Kalyon Holding, which has interests in a number of sectors, including construction.

“The group we formed is one of the best solution providers who can successfully implement all these projects,” Mr Ata said. “Syrian people are fed up with the struggle and the war of 15 years and are looking for development projects.”

The company is also looking at other opportunities in Syria, including the reconstruction of the airport, Kalyon Holding chief executive Mustafa Kocar said.

The company built Istanbul airport in Turkey and this expertise can be applied in Syria and other countries, he added.

Infrastructure devastated by war

The Syrian economy has been devastated by the civil war, with the UN's Development Programme estimating cumulative losses – including physical damage and economic deprivation – at more than $923 billion at the end of last year.

The estimated cost of reconstruction has varied from $250 billion and $500 billion, according to experts.

Earlier this month, US President Donald Trump made a surprise announcement about lifting economic sanctions on Syria as he visited Saudi Arabia to pave the way for investments in the country.

Following the decision, the European Union also said that it would begin lifting sanctions to help Syrian people rebuild the country.

Last week, Syria signed a separate agreement with Turkey for the supply of two billion cubic metres of natural gas to help the country overcome power shortages.

Deniz Bank is also bullish about Syria as the country reopens. “There will be a good opportunity for us,” Deniz Bank chief executive Recep Bastug told media in Istanbul.

“In the past, it was an opportunity of commercial, but now infrastructure and other parts of investment will be there … because Turkey has serious amount of construction power in terms of companies, there will be very important opportunities.”

However, he did not elaborate on the extent to which the lender’s balance sheet would be strengthened due to opportunities in Syria.

Emirates NBD bought Deniz Bank from Russia’s Sberbank for $3.2 billion to expand its footprint in Turkey in 2018.

Kris Adams, DP World's executive vice president for East Europe, said the reopening of the Syrian economy provides new opportunities for ports in neighbouring countries for shipment of cargo.

“A country that has been war-torn for many, many years is finally looking at some positives and will require a lot of rebuild,” Mr Adams said in Istanbul.

“The ports in the country itself will be relevant, but also ports in neighbouring countries like Turkey, which has a border with Syria, will see more cargo flowing through in order to assist with that rebuild.”

Earlier this month, Dubai-based DP World signed an initial agreement with the Syrian government to develop the port of Tartus in an $800 million deal.

Opportunity for many nations

Syria reopening is “not just an opportunity for Turkey but also for many other nations”, according to Burak Daglioglu, president of the Investment Office of the Presidency of Turkey.

“After the lifting of sanctions, the opportunities will be for all countries, but the biggest opportunity will be for civilians themselves."