THE SARG OVERSTATES THE POWER OF A TURKISH-SYRIAN

C O N F I D E N T I A L DAMASCUS 004876

SIPDIS

SIPDIS

NEA/ELA
NSC FOR MORCHESE

E.O. 12958: DECL: 10/11/2016
TAGS: ECON ENRG ETRD PREL SY
SUBJECT: THE SARG OVERSTATES THE POWER OF A TURKISH-SYRIAN
ELECTRICITY AGREEMENT


Classified By: CDA Michael H. Corbin for reasons 1.5 b/d


1. (C) Summary: Turkey will begin supplying Syria with
approximately 200 megawatts of electricity per year through
an electrical grid connection with Turkey's Birecik power
plant. After having remained static for three years, the
implementation of this agreement will still only provide 3.3%
of Syria's total power generation while Syria's ongoing
electricity shortfall is currently estimated at 750 megawatts
per year. However, the SARG is using the implementation of
the agreement as an example of new economic development and
to assert that ties between Turkey and Syria have never been
stronger. End Summary.


2. (U) Turkey has agreed to begin supplying Syria on October
11 with approximately 200 megawatts of electricity (1.4
billion kilowatts per year) through an electrical grid
connection with Turkey's Birecik power plant. In 2003, Syria
completed all the work on its side to connect the two grids,
but the final agreement was only signed by the Director
General of the Turkish Electricity Company, Haji Doran Koyaka
and the Director General of Syria's state owned electric
company, Mohammed Abu Jaish, in Aleppo on October 4.


3. (U) The Syrian news agency (SANA) reported that the
Syrian Minister of Electricity, Ahmed Khaled al-Ali gave a
speech saying, "the accord reflects the two neighboring
countries desire to deepen relations between them when it
stipulates to provide Syria with 1.4 billion kilowatts for
one year that can be extended." However, sources at the
Syrian Public Establishment of Electricity Generation and
Transmission (PEGT) downplay this agreement with Turkey,
noting it will provide only up to 3.3% of Syria's total power
generation (which in 2005 was about 6000 megawatts).


4. (C) Ferit Orcun Basaran, economic officer at Turkey's
Embassy in Damascus also downplayed the significance of the
agreement. He stressed that while Syria's public approval of
Turkey's management of the Euphrates headwaters over the past
year has helped to warm relations, Syria remains
insignificant to Turkey's economic perspective. The 2005
trade volume between Syria and Turkey was $800 million, with
Syrian exports representing $270 million and imports from
Turkey representing $550 million. Prior to 2004 Syria had
exported more to Turkey, but with declining oil production it
now receives an increasingly greater share of imports.
Basaran also stressed that Turkish investors do not view
Syria as a good investment opportunity which explains why
only 20 Turkish companies are currently invested in Syria.
Yet, while this is an insignificant number for Turkey,
Turkish investment is significant given the historically low
levels of foreign direct investment (FDI) in Syria. Syria's
government-owned paper Tishreen reported that in 2005 Turkish
investors accounted for the largest number of all government
approved foreign investment projects.


5. (C) Comment: The SARG is using this project as an
opportunity to demonstrate to the public that it is making
significant strides in economic development and that the
country is not politically isolated. Syria is also utilizing
this project to publicly praise Turkey and claim a deepening
of relations, a pattern that has increased over the past
year. However, in both instances, the SARG's public claims
overstate the facts. End Comment.
CORBIN