Gulf Finance House announced on Tuesday that it had signed a memorandum of understanding with the Syrian Investment Authority (SIA) on behalf of Syria Finance House (SFH), to develop an economic zone, power projects and phosphate mines.
With a capital of $333 million, Syria Finance House is one of the largest banks currently under establishment in Syria.
Gulf Finance House and Syria Investment Authority have been working together closely for months to spearhead this initiative and bring the opportunities it presents into reality.
SFH will take the lead in the conceptualisation of these opportunities, drawing up the necessary plans, structuring the financial instruments required to finance the projects, raise the necessary funds and sub contract the developers to commence with the work.
Explaining the reasoning behind the establishment of SFH, Esam Janahi, GFH chairman said: “The Syrian authorities have embarked on cross governmental reforms to create an open business environment, laying out strong commercial and legal frameworks that have attracted FDI and witnessed considerable growth in the Syrian economy.“
He added: “The impressive growth of private banks over the last five years, driven largely by deposits, has resulted in excess liquidity in the market, which could be better utilised in funding the various business and infrastructure opportunities in the nation. This made a compelling case to use our expertise in emerging markets and Islamic finance to establish SFH and look into infrastructure opportunities like phosphate mining, electricity power generation and developing an economic zone.”
With deposits being the main reason behind the Syrian market enjoying excess liquidity, Hisham Alrayes, head of private equity and venture capital, GFH, said that the finance house's plans to provide suitable investment opportunities to employ these deposits in the development of local business and the country itself, in line with the Syrian government's five year plan for socio economic growth and prosperity.
He added: "Through this plan, the government aims to attract $9 billion in various developments, which further adds to the significant demand for financing and project development."
Once licensed, 30 percent of SFH’s capital will come from an Initial Public Offering, whilst 10 percent will be funded from the local partners, while the remaining 60 percent will be funded by GFH, strategic financial institutions and its investors.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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