Gridlocked: Why Syria's future hinges on its energy sector

Damascus, Syria - With electricity only available a few hours a day, there is little relief from the sweltering heat these days in Damascus.

But US President Donald Trump's decision to lift long-standing sanctions on Syria in May, and a rash of recent energy deals, are triggering optimism that Syria’s electricity woes may soon begin to slacken.

Years of fighting, neglect and corruption have crippled over 50% of Syria's energy grid, with capacity dropping from 8,500MW in 2011 to just 3,500 currently, according to the European Institute for Strategic Studies.

As a result, most Syrians live with only a few hours of lighting a day, fridges that can’t preserve food, and plug sockets that can’t charge phones.

Turkish Energy Minister Alpan Bayraktar announced the intention to triple its energy exports to the country to assist the new government in achieving its immediate target of providing 10 hours of electricity a day.

Meanwhile, in late May, the new government signed a deal worth $7 billion with an international energy consortium led by Qatar’s UCC holdings, promising to double Syria’s energy capacity over the next three years.

Yet the scale of the problems plaguing the grid is immense, and the task of restoring it will be mammoth - so what will it take to get Syria’s energy grid back on its feet?

The fuel crisis

Despite the big-ticket deals, Syria’s most immediate challenge is that it simply doesn’t have enough fuel to run its remaining power plants.

Before the Syrian civil war, the country was a net fossil fuel exporter, but the conflict has seen its oil and gas production fall by a staggering 95% according to numbers from BP’s 2019 statistical review.

This problem was compounded after the fall of the regime, when Iran, which had become Syria’s primary source of fossil fuels, cut off supplies. Turkey and Qatar have rushed to fill in this gap, but have not currently been able to meet capacity.

This scarcity of fuel also renders running private generators, as has become the solution to the collapsed energy grid in neighbouring Lebanon, “prohibitively expensive”, Benjamin Fève, a senior research analyst at Karam Shaar Advisory Ltd, tells The New Arab.

Addressing this fuel shortage is likely the quickest way that the new government can increase the number of hours electricity is available. Now that US sanctions have been lifted temporarily, Syria can increase its fossil fuel imports.

Yet, with the government cash-strapped and the bill for fuelling the grid “running into the several billion per year,” says Fève, the government is unable to foot the bill alone. As a result, they are largely reliant on the benevolence of its allies, most notably Turkey and Qatar, in delivering fossil fuels.

“Such interventions can only temporarily relieve critical bottlenecks and allow limited recovery of economic activity,” suggests Dr Ziad Ayoub Arbash, Professor of Economics at the University of Damascus, because “true stability cannot be achieved without a self-sustaining financing model”.

One potential option is to ramp up domestic production. However, the majority of Syria’s fossil fuel deposits remain in the hands of the Kurdish-majority Syrian Democratic Forces (SDF).

Whilst the SDF has agreed to hand over control of the region's fossil fuel to Damascus, this agreement still largely remains on paper.

Yet ultimately, the problem still lies in Syria’s “extractive capacities,” says Fève, “due to the scale of the destroyed infrastructure and loss of energy sector operators”. Restoring this capacity is not a quick fix. It will require significant foreign investment.

Whilst the SDF has resumed sending oil to government-controlled areas, this amounts to a measly 5,000 barrels of oil per day. Compare this to the fact that in 2010, Syria exported 380,000 barrels per day.

Decaying infrastructure

The most sizable problem facing Syria’s electricity grid is that large sections of its key infrastructure - nearly two-thirds - have either been destroyed or left in a state of decay over the last decade.

The Syrian Ministry of Energy estimates that the cost of repairs alone could run to $5.5 billion - a figure that does not include restoring sections of destroyed infrastructure.

Key power plants in Mahardah, Aleppo, and Zayzoun have been destroyed, and 40% of the country’s transmission lines have also been damaged. Existing infrastructure is also suffering from widespread looting of valuable electrical cables.

This is why last week's $7 billion energy agreement, which plans to build four new gas power plants and a solar plant with a total capacity of 5000MW, represents a “quantum leap” for Syria’s energy sector, according to Arbash.

It represents the first tranche of investment required to begin putting the pieces of Syria’s energy network back together. However, he adds that reaching its full potential requires “rigorous institutional preparation”.

Beyond just securing high-profile investments, the Syrian government must be able to repair and modernise the key transmission lines that crisscross the country, whilst ensuring that they stay free from looting and people siphoning electricity illegally off the grid.

This is not a simple technical fix and depends on the government overcoming one of its main political challenges of ensuring security across the country.

Sanctions

Another issue for the sector is uncertainty around the future of the sanctions regime. Following President Trump’s announcement in May, the State Department issued a 180-day waiver of sanctions under the Caesar Act.

Yet the process of totally unwinding the sanctions regime is lengthy and requires the approval of Congress. As a result, investors may still be deterred from putting their money into large, long-term infrastructure projects.

They fear the mercurial president could backtrack on his decision in the face of opposition on the Hill from individuals like Republican Senator Lindsey Graham, who has urged “caution” on sanctions relief.

Until sanctions are fully lifted, the energy companies willing to invest “will likely only be those who have been provided some degree of cover by their political backers,” argues Caspar Hobhouse, a Research Analyst at the EU Institute for Security Studies.

Before 2011, Western energy majors used to have a sizable presence in the country. Royal Shell was the majority shareholder of a Syrian subsidiary responsible for producing 100,000 barrels per day in 2010.

However, Hobhouse doubts that “any of the private energy giants would currently want to touch Syria with a barge pole,” due to the country’s current “poisonous investment climate”.

Beyond uncertainty around sanctions, concerns around the stability and checkered history of the new regime, as well as its capacity to ensure the security of energy infrastructure, would likely deter major private investors from taking the risk.

But without serious foreign investment, rebuilding the energy grid will be a challenge, potentially undermining the entire recovery project. As Hobhouse puts it, “you need a functioning energy grid to have any sort of economic recovery”.

He points out that “a factory cannot operate on a few hours of electricity a day, and few investors will be willing to take the risk in building new factories until a stable energy grid is established”.

The lack of electricity over the last decade has been a huge drag on the Syrian economy. According to Ghassan al-Zamel, former Minister of Electricity under the Assad regime, speaking in 2024, the combined direct and indirect costs of Syria’s collapsed energy grid could amount to $120 billion over 12 years.

“Syria can never become a destination for inward investment without electricity,” argues Hobhouse. It is needed to function as the lifeblood of Syria’s economy, yet in large part still hinges upon Damascus and Washington’s ability to foster a Syria worth taking a bet on.

A new start

However, there could be an opportunity to develop a new energy model for Syria that more adequately navigates the challenges facing reconstruction.

“Syria has the opportunity to develop a diffuse grid,” claims Hobhouse, “where you have localised energy providers, for instance through the installation of residential solar panels”.

Fostering such an approach could help circumvent the vast amount of capital and time required to restore Syria’s large-scale energy infrastructure, whilst more directly addressing Syria's urgent electricity shortage.

Under Assad, the import of solar panels was heavily taxed, making them prohibitively expensive, yet since the fall of the regime and the lifting of sanctions, their price has dropped significantly.

Furthermore, Hobhouse believes adopting a diffuse grid will have a “democratising effect” on the energy system, making Syrians “far less vulnerable to a central authority just turning off the electricity supply on a whim”.

Equally, there is now a potential opportunity to shift the energy sector, which has been almost entirely built around fossil fuels, towards renewable energy, argues Ziad Ayoub Arbash.

He believes that the best way forward for Syria's energy sector lies in accelerating the adoption of renewable energy sources, due to the long-term economic and environmental advantages of renewable sources, including “energy independence, job creation, and reduced operational costs.”

For Arbash, rebuilding “only through a holistic approach can Syria achieve sustainable recovery and growth”.

“The path forward must go beyond headline contracts and emergency fixes. The real measure of success lies in the seriousness of implementation, the integrity of the regulatory environment, and the ability to embed energy planning within a comprehensive economic strategy.”

Cian Ward is a journalist based in Beirut, covering conflict, migration, and humanitarian issues

Follow him on X: @CP__Ward