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Saudi firms plan billion-dollar investments in Syria

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US sanctions are 'final chokehold'

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Countries discussing rail link via Jordan

(Adds U.S. backing for repeal of Caesar sanctions on Syria in

paragraphs 9-10)

By Timour Azhari

DOHA, Oct 31 (Reuters) - Major Saudi Arabian firms are

planning billion-dollar investments in Syria as part of the

kingdom's business-forward approach to the country's recovery,

but U.S. sanctions and a fractured Syrian state apparatus pose

formidable obstacles.

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.

A U.S. State Department spokesperson said the Trump

administration supports repealing the Caesar sanctions on Syria

through the National Defense Authorization Act bill, which is

under discussion by U.S. lawmakers.

"The United States is in regular communication with regional

partners and welcomes any investment or engagement in Syria that

supports the chance for all Syrians to have a peaceful and

prosperous country," the spokesperson said.

Syria's information ministry did not immediately respond to

requests for comment.

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 Crown Prince Mohammed bin Salman'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, the Saudi crown prince 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

was now meeting with global figures - including FIFA President

Gianni Infantino - and taking selfies with admirers while

strolling 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."