For Syria, Qatar's $7 billion power plan hinges on it fixing its grid
Qatar has pledged to help war-torn Syria rebuild, but its $7 billion plans for new power plants will mean little unless Damascus can stop armed gangs from looting power cables faster than the cash-strapped government can fix them.
The deal announced last week by an international consortium led by Qatar's UCC Holdings promises to massively expand Syria's generation capacity.
It marks Syria's biggest foreign investment announcement since U.S. President Donald Trump unexpectedly announced the lifting of U.S. sanctions on Damascus last month.
For the Islamists who toppled Bashar Assad in December, it is a vital step toward getting Syria's infrastructure back on its feet, as they seek to revive the economy and offer hope to a population exhausted by 14 years of conflict.
But for Syrians to feel the benefit, the government must first fix the transmission grid. Years of neglect have left the sprawling network of transformer stations and towers stripped as looters continue to steal cables and other components.
Two-thirds of the grid is either completely destroyed or in need of major repair, with a repair bill the Energy Ministry currently puts at $5.5 billion, money the state does not have, meaning private investment or other donors must be found.
Energy Minister Mohammed al-Bashir said the Qatari-led projects — four combined-cycle gas turbine power plants plus a solar plant — would need three years to be fully operational.
"During that time, we may complete the grid rehabilitation," he said.
A drone view shows Syria's largest power plant in Deir Ali, south of Damascus, on May 20. |
REUTERS
Before 2011, the grid reached 99% of Syrians. Today, it generates less than a fifth of its prewar output, much of which is stolen. In addition to stealing cables and other components, people are also siphoning off power.
That means Syrians get only a few hours of power each day from the grid — even in Damascus, where the air can reek of fumes created by makeshift generators.
With electricity so limited, Syrians shape their daily routines around the power schedule, often waking up early to do laundry when electricity is available, for example, then returning to bed.
Without reliable power, refrigerating food is another problem, forcing families to buy and cook just enough fresh food for the day.
The problem is a leading one for new interim President Ahmed al-Sharaa as he seeks to revive the economy. Choked by sanctions until last month, his government has struggled to establish its grip, with armed groups spread throughout Syria.
In the chaos following the fall of Assad, looters have felled transmission towers across the country, stealing cables in order to sell copper and aluminum on the black market.
Near Syria's biggest power plant — Deir Ali, south of Damascus — severed cables dangle from now disconnected transmission towers.
"Our teams work in one place and the looting is somewhere else," said Khaled Abu Di, head of Syria's Public Establishment for Transmission and Distribution of Electricity.
Over 80 kilometers of cables in southern Syria have been looted since Assad's fall, he said, noting looting in eastern Syria had thwarted efforts to restore a key transmission line.
Security forces were now helping to secure the line, he said. "But we are talking about 280 kilometers of line; we can't hire security along this long line."
Ahmad Alakhras, who is leading grid restoration efforts in the south, said his teams often witness looting but are powerless to intervene as the thieves are usually armed.
"Our warehouses are almost empty. Between the cities of Sweida and Deraa, 130 tons of high-voltage aluminum conductors were stolen in the past months," he said.
Missing ingredients
Syria is of course only just taking its first steps in recovering from war, and therefore remains a high-risk destination for investors, lacking key ingredients such as a stable currency, a functional banking sector, and security, said Ghiath Bilal, an expert on the country's power sector.
Insecurity and a lack of territorial control are hindering government attempts to patch up the grid, he said.
Energy Minister al-Bashir said the government is banking on the private sector taking a leading role in fixing the grid, with companies potentially partnering with the state as contractors.
Under such deals, they would be able to sell energy to consumers, recouping their investments.
A power plant in Deir Ali, near Damascus, on May 20 |
REUTERS
Since Trump announced that sanctions would be lifted, Chinese, U.S., Qatari and Turkish firms have all shown interest in potential investments in the grid, said Energy Ministry spokesperson Ahmad Suleiman.
Government plans foresee private investors renting transformer stations and high-voltage transmission lines until they redeem their investments, he said.
A major challenge for investors is that Syria's power has long been heavily subsidized, with consumers under Assad's rule paying a fraction of the real cost.
With 90% of Syrians below the poverty line, any removal of subsidies would be gradual, said Samer Dahy, an electricity sector researcher for the Lebanese Institute for Market Studies.
Yet some investors see scope for undercutting the price of current makeshift substitutes, such as private generators. Syrian businessman Diaa Qaddour, who is planning a $25 million investment in the grid in northern Syria, expects to offer prices well below levels currently paid by consumers relying on such substitutes.
Through his Turkey-licensed company, STH Holding, Qaddour said his initial plan is to electrify up to 150,000 homes in rural Aleppo, drawing on power from neighboring Turkey.
He is bullish despite the challenges, citing experience of operating in the north, where Turkey long held sway as a major backer of the opposition to Assad.
"The best thing we have going for us is that we've been present on the ground for five years," he said.
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