Bahrain-based Gulf Finance House (GFH) has signed a memorandum of understanding to develop an economic zone, power projects and phosphate mines in Syria.

GFH signed the MoU with the Syrian Investment Authority (SIA), on behalf of Syria Finance House (SFH), an Islamic bank under establishment with a capital of $333 million by GFH.

The announcement was made at a press conference held on the sidelines of the 5th Islamic Banks and Financial Institutions Conference in Syria, at the Four Seasons Hotel in Damascus.  The conference was hosted by GFH.

SFH will take the lead in conceptualising these projects, draw up the necessary plans, structure the financial instruments required to finance these projects, raise the necessary funds and engage developers to commence the work, said a statement.

Last week, GFH announced that it’s in an advanced stage of obtaining a license from the Central Bank of Syria for SFH that would operate in both commercial and investment banking activities.

“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,” said Gulf Finance House chairman Esam Janahi.

“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,” he added.

Dr Ahmed A.ziz, head of Syria Investment Authority, said: “We have been working for some time now with GFH to study and explore a number of infrastructure development opportunities and we are pleased today to sign this agreement, marking the first milestone towards creating promising investments for the economy of Syria and SFH’s stakeholders.”

“The Syrian market enjoys excess liquidity, with deposits the main reason behind the 30 per cent growth in private banking,” said Hisham Alrayes, head of private equity and venture capital at GFH. “Our plan is to provide suitable investment opportunities to employ these deposits and 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. 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,” he said.

Once licensed, 30 per cent of SFH’s capital will come from an Initial Public Offering while 10 per cent will be funded from the local partners and the remaining 60 per cent will be funded from GFH, strategic financial institutions and its investors, the statement said. – TradeArabia News Service