Payments in Saudi Arabia and Katari stabilized Syria’s owed, allowing the World Bank and the International Monetary Fund to re-engage.
The World Bank said it will restart its operations in Syria after it cleared more than $15 million in debt with financial support from Saudi Arabia and Qatar.
The U.S.-based agency announced on Friday that Syria no longer assumes outstanding obligations to its International Development Association (IDA), which is specifically targeting low-income countries.
Earlier this week, Saudi Arabia and Qatar paid off about $15.5 million in Syria’s outstanding debt, paving the way for interactions with international financial institutions.
"We are pleased that clearing out the debts from Syria will allow the World Bank Group to re-engage with the country and meet the development needs of the Syrian people," the bank said. "After years of conflict, Syria is on the road to recovery and development."
The bank is now preparing its first project in Syria, which will focus on improving electricity tolls, a key pillar for revitalizing essential services such as healthcare, education and water supply.
Officials said this marks the beginning of expanded support aimed at stabilizing Syria and promoting long-term growth.
The bank's announcement coincides with a huge shift in U.S. policy towards Damascus.
U.S. President Donald Trump announced Tuesday that Washington will begin lifting sanctions imposed on Syria, including measures taken under the Caesar Syrian Civilian Protection Act.
Trump met Syrian President Ahmed Al-Sharaa in Riyadh on Wednesday, marking a historic breakthrough in relations between the two countries and the first such meeting between leaders of the two countries in 25 years.
Secretary of State Marco Rubio confirmed it would exempt the waiver, relaxing restrictions on entities that had previously dealt with the current former Bashar al-Assad government, which was overturned in December.
“The introduction of sanctions against Syria is a fundamental turning point,” economist and banking expert Ibrahim Nafi Qushji told Al Jazeera. “The Syrian economy will transition from interaction with developing economies to integration with more developed economies, which could significantly reshape trade and investment relations.”
After 13 years of civil war and isolation, these actions represent an important moment for Syria to reintegrate into the global financial system.
In April, a rare meeting was held in Washington, involving officials from Syria, the International Monetary Fund, the World Bank and Saudi Arabia. The subsequent joint statement acknowledged the grim state of the Syrian economy and committed to coordinate efforts to support its recovery.
Since then, the International Monetary Fund has appointed its first missionary chief in Syria within more than a decade. Ron Van Rooden, who has been involved in the IMF operations in Ukraine, will lead the fund's new participation.
Martin Muehleisen, former head of strategy at the IMF, pointed out the urgency of providing technical assistance to financial institutions in rebuilding Syria. He told the news agency that he added: “These efforts can be funded by donors and grants.”
Al-Assad was overthrown in December after a lightning offensive by opposition fighters led by Hay'et Tahrir al-Sham armed group.
Syria's new government is trying to rebuild the country's diplomatic ties, including with international financial institutions. It also counts on wealthy Arab countries to play a key role in funding the reconstruction of Syria’s war-affected infrastructure and restore the economy.
The government, led by interim president al-Sharaa, also hopes to transition from the system that privileges Al-Assad loyalists to obtain government contracts and holds key industries in the hands of the Al-Assad family.