Saudi Arabia plans to pay off Syria's World Bank debts, sources say

Saudi Arabia plans to pay off Syria's debts to the World Bank, three people familiar with the matter said, paving the way for the approval of millions of dollars in grants for reconstruction and to support the country's paralysed public sector.

The plans, which have not been previously reported, would be the first known instance of Saudi Arabia providing financing for Syria since rebels toppled former leader Bashar Al Assad last year. It may also be a sign that crucial Gulf Arab support for Syria is beginning to materialize after previous plans, including an initiative by Doha to fund salaries, were held up by uncertainty over US sanctions.

Last month, Qatar announced a plan to provide Syria with gas via Jordan to improve the nation's meagre electricity supply, a move that sources told Reuters had Washington's nod of approval.

A spokesperson for the Saudi Ministry of Finance told Reuters, "We do not comment on speculation, but make announcements, if and when they become official."

The Saudi government's media office, a World Bank spokesperson and a Syrian government official did not immediately respond to requests for comment.

Syria has around $15 million in arrears to the World Bank which must be paid off before the international financial institution can approve grants and provide other forms of assistance. But Damascus is short of foreign currency and a previous plan to pay off the debts using assets frozen abroad did not materialize, according to two people familiar with the matter.

World Bank officials have discussed providing financing to help reconstruct the country's power grid, heavily damaged by years of war, and also to support public sector pay, two of the sources said.

A technical delegation from the World Bank met with Syria's Finance Minister Mohammed Yosr Bernieh on Monday, according to the Syrian state news agency Sana.

The meeting, which was the first public meeting between the Syrian government and the World Bank, included discussions on strengthening financial and economic ties between the two sides.

Bernieh also highlighted the negative effects of the international sanctions imposed on Syria and policies of the former regime on the country's financial and banking sector.

Reuters reported on Saturday that Syria would send a high-level delegation to Washington for the yearly spring meetings of the World Bank and IMF later this month, marking the first visit by Syrian officials to the US since Assad's ouster. It is unclear whether the Syrian delegation will meet with any U.S. officials.
Tough U.S. sanctions imposed during Assad's rule remain in place.

In January, the US issued a six-month exemption for some sanctions to encourage humanitarian aid, but this has had limited effect.

Reuters