Turkey Eyes Reconstruction Windfall in Syria as Sanctions Lift and Grid Projects Begin

As Syria takes its first tentative steps toward post-war recovery, Turkey is emerging as one of the key beneficiaries of a new investment boom, following the lifting of U.S. sanctions by President Donald Trump last month. Major Turkish firms are joining international efforts to rebuild Syria’s decimated infrastructure, with a particular focus on energy, construction, and manufacturing.

One of the most significant investments to date is a $7 billion energy infrastructure agreement led by Qatar’s UCC Holdings, which includes Turkish companies such as Kalyon GES Enerji Yatırımları and Cengiz Enerji. These firms are set to help expand and modernize Syria’s electricity grid—a critical component of the country’s recovery plan after 14 years of war.

Rebuilding Syria’s Power Grid: A Daunting Challenge

Despite the ambitious nature of these deals, Syria’s electricity grid remains in a state of near-collapse. Two-thirds of the grid is either destroyed or severely damaged, with the Energy Ministry estimating a $5.5 billion repair bill. Looting of transmission lines, theft of copper cables, and armed resistance in rural areas have hindered restoration efforts.

“Fixing the grid is a prerequisite for making any power plant operational,” Syria’s Energy Minister Mohammed al-Bashir told Reuters, noting that full functionality of new facilities may take up to three years.

Yet even as Syria pursues renewable energy sources such as solar power, most households currently receive only a few hours of electricity each day. Makeshift generators, often running on expensive diesel, have become a costly and unreliable alternative.

Turkish Business Sees Opportunity in Crisis

Turkish exports to Syria surged 37% year-over-year in the first four months of 2025, with machinery exports more than tripling. Trade in construction materials, non-ferrous metals, glass, and ceramics is also booming as Syrian demand spikes.

Istanbul-based Formul Plastik reported receiving its first large-scale orders from Syria. “This used to be a market we could only dream about,” said Ömer Hot, a company director. “Now, it’s opening wide, and we estimate Turkish companies could take up to a quarter of Syria’s reconstruction market.”

Turkish cement companies, led by the Cement Manufacturers’ Association, are also optimistic. “It is out of the question that we will not take advantage of the opportunities,” said CEO Volkan Bozay.

Still, logistical hurdles remain. Payments are often made via exchange bureaus instead of banks, and concerns persist about customs procedures, tax policy, and a shaky security environment. Nevertheless, Turkish firms are cautiously bullish.

Turkish Firms Lead the Charge

STH Holding, a Turkish-licensed firm, plans to invest $25 million to electrify 150,000 homes in rural Aleppo using power drawn from neighboring Turkey. Other large firms are waiting for clear frameworks from Syria’s interim government under President Ahmed al-Sharaa before expanding operations.

Ziraat Bank, Türkiye’s top state lender, has confirmed its willingness to support Syria’s banking sector once the financial and legal conditions are right. This would mark a major step in normalizing bilateral economic relations.

From Crisis to Strategy: Turkey’s Regional Role Expands

Beyond commerce, the reconstruction effort is part of Ankara’s broader regional strategy. By anchoring its presence in Syria through energy and infrastructure, Turkey is positioning itself as a stabilizing force—and a gatekeeper—in the Eastern Mediterranean and Levant.

Ankara’s pledge to supply natural gas, modernize power lines, and even invest in Syria’s planned stock market reopening underscores its deepening influence in the post-Assad era.

Massive Needs, Massive Risks

According to the World Bank, Syria’s total reconstruction needs may reach $400 billion. Some officials, including the country’s economy minister, put the figure closer to $1 trillion.

A major constraint is Syria’s labor shortage. With over 6.2 million refugees abroad and 7.2 million internally displaced, rebuilding will require cash-for-work programs and vocational retraining. Despite the challenges, Turkish manufacturers are also eyeing Syria as a potential low-cost production hub.

“Lower production costs in Syria are an advantage,” said Ahmet Öksüz of Kipaş Textiles. “But Turkish and Syrian authorities must coordinate to create safe and organized industrial zones.”

A Fragile But Growing Partnership

Security remains the top concern for investors. While President al-Sharaa has pledged to restore order, much of Syria remains volatile. Former Turkish-Syrian business council director Hakan Bucak warned: “Security risks must be fully eliminated. Investors need to feel safe to invest.”

Still, a cautious optimism prevails in Ankara and Istanbul. Turkey’s re-engagement with Syria is not just humanitarian—it’s a calculated economic and geopolitical move. If successful, it could mark the beginning of a new era in regional integration and diplomacy.

IMPORTANT DISCLOSURE: PA Turkey intends to inform Turkey watchers with diverse views and opinions. Articles in our website may not necessarily represent the view of our editorial board or count as endorsement.

Follow our English language YouTube videos @ REAL TURKEY: https://www.youtube.com/channel/UCKpFJB4GFiNkhmpVZQ_d9Rg
And content at Twitter: @AtillaEng
Facebook: Real Turkey Channel: https://www.facebook.com/realturkeychannel/