Syria signs first syndicated Islamic financing deal
Three Syrian banks will finance major Damascus infrastructure projects through Shariah-compliant facility backed by government
DAMASCUS, Syria (MNTV) — Syria has signed its first syndicated bank financing agreement structured under Islamic finance principles, bringing together three banks to fund two development projects in Damascus as the government seeks alternatives to direct budget financing.
Arab News reported that Al Baraka Bank Syria, QNB Syria and the Commercial Bank of Syria are participating in the facility, which is sponsored by the Finance Ministry and Central Bank of Syria and carries a sovereign guarantee.
The agreement will finance the Al-Mujtahid–Bab Musalla tunnel and the final phase of the Qasioun Journey project.
The financial value, duration, profit rate and individual allocations among the three banks were not disclosed. Syrian officials presented the arrangement as a new financing model that could help fund development projects while reducing pressure on limited public resources.
Finance Minister Mohammed Barnieh said the government could no longer depend entirely on its budget to finance every development project and therefore needed additional financing mechanisms to meet growing investment requirements.
Government revenue reached about $2.7 billion during the first half of 2026, while expenditure stood at approximately $3.7 billion, leaving a deficit of around $1 billion, according to figures from the Finance Ministry.
The financing agreement comes as Damascus seeks to expand investment while managing that fiscal gap.
The facility will support construction of the planned Al-Mujtahid–Bab Musalla underground tunnel, which is expected to extend about two kilometers and connect western and eastern parts of Damascus.
Governor Maher Marwan said construction could take between two and two-and-a-half years, substantially shorter than an earlier estimate of about a decade.
Financing for the final stage of the Qasioun Journey development will cover structural works, external finishes and water, sewage and electricity networks. The project is scheduled to open in summer 2027, according to the governor.
Marwan said the Islamic financing arrangement had undergone review by Syria’s Supreme Fatwa Council and specialists representing the participating banks. He described the facility as offering a relatively low profit margin and flexible repayment conditions.
Central Bank Governor Mohammed Raslan said syndicated financing could increase the ability of Syrian banks to support infrastructure projects by combining the resources of state-owned and private financial institutions, including both Islamic and conventional lenders.
The agreement comes as Syria faces extensive reconstruction requirements after more than 13 years of conflict.
The World Bank estimates the country’s reconstruction needs at about $216 billion, including roughly $82 billion for infrastructure, while direct physical damage has been estimated at $108 billion.
Separately, a US economic delegation met Syrian Sovereign Fund officials to examine potential investment opportunities, with the fund saying several projects involving US companies were under discussion. The talks followed Washington’s termination of its Syria sanctions program in July 2025.
The World Bank also approved a $100 million grant in August to help modernize Syria’s financial sector, supporting banking rehabilitation, payment infrastructure, supervision and financial-integrity systems as Damascus works to rebuild its economy.
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