Iran had imperial ambitions in Syria. Secret embassy documents show why it failed

Iran had a grand plan for Syria – taken right from the playbook of a country it considers its arch-enemy.

Just as the United States solidified its global dominance by investing billions in rebuilding Europe after the Second World War, Iran would do the same in the Middle East by reconstructing a war-ravaged Syria.

The ambitious program, outlined in a 33-page official Iranian study, makes several references to “The Marshall Plan,” America’s blueprint for resurrecting post-War Europe. The US strategy succeeded: It made Europe “reliant on America,” a presentation accompanying the study says, by “creating economic, political and socio-cultural dependence.”

The document, dated May 2022 and authored by an Iranian economic-policy unit stationed in Syria, was found by Reuters reporters in Iran’s looted Damascus embassy when they visited the building in December. It was among hundreds of other papers they uncovered there and at other locations around the capital – letters, contracts and infrastructure plans – that reveal how Iran planned to recoup the billions it spent saving President Bashar al-Assad during the country’s long-running civil war . The Syria-strategy document envisions building an economic empire, while also deepening influence over Iran’s ally.

“A $400 billion opportunity,” reads one bullet point in the study.

These imperial hopes were crushed when rebels hostile to Iran toppled Assad in December. The deposed dictator fled for Russia . Iran’s paramilitaries, diplomats and companies beat their own hasty exit. Its embassy in Damascus was ransacked by Syrians celebrating Assad’s demise.

The building was littered with documents highlighting the challenges facing Iranian investors. The documents and months of reporting reveal new insight into the doomed effort to turn Syria into a lucrative satellite state.

Reuters interviewed a dozen Iranian and Syrian businessmen, investigated the web of Iranian companies navigating the gray zones of sanctions , and visited some of Iran’s abandoned investments, which included religious sites , factories, military installations and more. Those investments were stymied by militant attacks, local corruption, and Western sanctions and bombing runs.

Among the investments was a €411 million power plant in coastal Latakia being built by an Iranian engineering firm. It stands idle. An oil extraction project is abandoned in Syria’s eastern desert. A $26 million Euphrates River rail bridge built by an Iranian charity linked to Supreme Leader Ayatollah Ali Khamenei collapsed under a US coalition airstrike years ago, and was neither repaired nor fully paid for.

The roughly 40 projects in the abandoned embassy files represent a fraction of Iran’s overall investment. But in this assortment alone, Reuters found that Syria’s outstanding debts to Iranian companies toward the end of the war amounted to at least $178 million. Former Iranian lawmakers have publicly estimated the total debt of Assad’s government to Iran at more than $30 billion.

Hassan Shakhesi, a private Iranian trader, lost €16 million in vehicle parts he shipped to Syria’s Latakia port just before Assad fled. “I’d set up an office and home in Syria. That’s gone,” said Shakhesi. He said he was never paid for the goods, which disappeared. “I hope Iran’s long history with Syria isn’t just wiped out. I’m now having to look at business elsewhere.”

Ultimately, Iran’s hopes to emulate the Marshall Plan and build an economic empire encompassing Syria went more the way of America’s debacles in Iraq and Afghanistan.

Early intervention in Syria’s civil war on the side of Assad deepened Iran’s influence over this gateway to the Mediterranean Sea. The story of the squandered investments reveals the financial risk that brought, and how the mutual reliance of the pariah governments of Syria and Iran hurt both.

For Iran’s rulers, Assad’s fall and the collapse of their Syria plans come at a precarious time. They have been weakened by Israel’s decimation of the Islamic Republic’s key proxies, Hezbollah in Lebanon and Hamas in Gaza. They are under pressure from US President Donald Trump to negotiate a deal that could neuter Iran’s nuclear program , or face possible military action if they balk. Iran’s regional rivals, including Turkey and Israel , are rushing to fill the vacuum left by its departure. The nascent Syrian government, for its part, has to contend with multiple frozen infrastructure projects as it tries to rebuild the war-ravaged country .

Reuters reporters discovered an array of documents as they visited Iran’s centers of soft power in Syria after Assad’s fall – diplomatic, economic and cultural offices. They photographed nearly 2,000 of the records, including trade contracts, economic plans and official cables, and left them where found. Reporters then used artificial intelligence, including the AI legal assistant CoCounsel owned by Thomson Reuters, to summarize and analyze the texts.

Iran’s foreign ministry spokesman Esmail Baghaei said in December he expected the new Syrian leadership to honor the country’s obligations. But it’s not a priority for the new government, led by a former rebel group, Hayat Tahrir al-Sham, that fought Assad and his Iranian backers.

Iranian government officials did not respond to requests for comment about the findings by Reuters.

“The Syrian people have a wound caused by Iran, and we need a lot of time to heal,” the new president, Ahmed al-Sharaa, said in an interview in December. Neither al-Sharaa nor other officials from Syria’s new government responded to requests for comment from Reuters about Iran’s role in the fallen regime. Sharaa’s HTS, initially an offshoot of Al Qaeda, severed those ties years ago and says it wants to build an inclusive and democratic Syria. Some Syrians, especially non-Sunni minorities, fear it retains the jihadist goal of establishing an Islamic government.

For most Syrians, the departure of Assad and the Iran-backed militias was cause to celebrate. Those Syrians who worked with Iranians have mixed feelings, however, about the exodus of Iranian business, which has left many of them without an income.

“Iran was here, that was just the reality, and I made a living from it for a while,” said a Syrian engineer who worked on the idled Latakia power plant.

The engineer asked not to be named for fear of reprisals for working for an Iranian company, after a spate of revenge killings last month against Syrians associated with the old regime. He said the Latakia project was hobbled by financial problems, Syrian corruption and underqualified workers from Iran, but that once completed would have boosted Syria’s struggling grid.

“The power plant was something for the future of Syria,” he said.

IRAN’S MAN IN SYRIA

The man tasked with executing Iran’s economic plans in Syria was a bearded construction manager from the Islamic Revolutionary Guards Corps named Abbas Akbari. He was promoted with fanfare in March 2022 to lead a unit called the Headquarters for Developing Economic Relations of Iran and Syria. Its task was to boost trade and recoup Iran’s investment. His team produced the study that held up the Marshall Plan as a model.

Akbari enlisted comrades in the Revolutionary Guards, an elite branch of Iran’s military, to help with logistics on civilian projects.

Reuters found letters signed by Akbari in Iran’s looted embassy. The documents include details of projects he supported and the money spent. Near the scattered papers was a vault and a pack of C4 explosives discovered by fighters who were guarding the building. Akbari did not respond to a Reuters request for comment.

Iran’s foray into Syria began long before Akbari’s arrival. Mapna Group, an Iranian infrastructure conglomerate that hired the Syrian engineer who worked on the Latakia project, won its first major contract in 2008 to expand a power plant near Damascus. That was soon followed by a second contract to build another plant near the city of Homs.

The deals were part of a growing Iranian investment in Syria in the years ahead of the 2011 uprising against Assad, as US sanctions shut off both countries to the West. They were the fruit of a relationship dating back to the Iranian revolution of 1979, which led to the overthrow of the Shah and the establishment of the Islamic Republic.

Assad’s father, President Hafez al-Assad, was the first Arab leader to recognise the republic and helped arm Ayatollah Ruhollah Khomeini’s fledgling Shi’ite Muslim theocracy in its 1980s war with Iraq. They fought Israel during the Lebanese civil war – Iran via its Hezbollah proxy – and later sent fighters and weapons to resist the American occupation of Iraq after 2003.

Iran’s political investments in Iraq, Syria and Lebanon paid off for years. Like Iran, Iraq and Lebanon have significant populations of Shi’ite Muslims, and Shi’ite paramilitaries nurtured by the Revolutionary Guards dominated successive governments in Baghdad and Beirut. Syria became the key transit route for weapons and personnel across the “Axis of Resistance,” the name Iran gives to the armed groups and states it supports against Israel and the West.

Syria also held religious importance for Iran, which sent hundreds of thousands of pilgrims each year to visit the Sayyeda Zeinab shrine, the mausoleum of the Prophet Mohammed’s granddaughter, situated just south of Damascus.

Economic ties took off in the mid-2000s, around the time Mapna got its first contracts.

But then came the Syrian uprising against Assad in 2011, part of the wave of Arab Spring uprisings. The rebellion threatened a range of Iranian military, political, religious and, increasingly, economic interests.

Hundreds of thousands of Syrians rose up against the Assad government, which he ruled through an elite of the Alawite minority, an offshoot of Shi’ite Islam.

His crackdown turned the rebellion into an armed insurgency dominated by Sunni Islamist groups. The civil war caused ethno-religious rifts, bringing chaos to a country home to Sunnis, Muslims, Christians, Alawites, Kurds and others, with minorities increasingly fearful of a sectarian rebellion.

Shi’ite Iran – along with Assad’s other main backer, Russia – came to Assad’s aid, sending arms and manpower. Iran also sent engineers and entrepreneurs.

‘NEVER LEFT ITS BROTHERS ALONE’

In late December 2011, the reality of operating in wartime Syria hit Mapna. Syrian rebels kidnapped seven Iranians working on the Jandar power plant near Homs, Iranian state news reported. Two were killed, according to a 2018 letter from the company to Syria’s electricity minister seen by Reuters.

But the strife deepened Mapna’s investment, bringing it new contracts to repair Syria’s battle-damaged power grid, which by 2015 was producing less than half of pre-war output. The most ambitious deal was to build the Latakia plant.

The projects were troubled and costly from the outset, according to letters from the company seen by Reuters, and the Syrian engineer who worked at Latakia.

“Latakia was supposed to take 20 months, starting around 2018,” he said. “Now it’s frozen.”

Mapna announced in November 2024, a month before Assad’s ouster, that it was about halfway through construction.

The engineer said Syria insisted on using a subcontractor with links to the Assad family that hired largely unqualified builders and engineers. He said Mapna’s own staff included capable workers, and some who appeared to have got their jobs through Iranian connections.

“There were always financial issues: delayed payments between the governments, plus currency fluctuations,” he said.

The engineer’s account of payment issues and Syrian bureaucracy was corroborated by letters in the embassy, which also show how Mapna's own capital was at risk.

A 2017 letter from the company to the Iranian ambassador said that Syria was changing the terms of finalized deals, leaving Mapna to finance the Latakia power plant entirely, as well as another project initially agreed with 60% Mapna financing. A year later, the company president complained in a letter to Syria’s electricity minister that the government had ignored an offer to ship parts for an Aleppo plant and dragged its feet on approving other contracts with Mapna, which had incurred tens of millions of euros in costs.

“Mapna Group has never left its brothers alone in the Ministry of Electricity of Syria … during seven years of civil wars while all foreign companies left,” is how Mapna President Abbas Aliabadi, now Iran’s energy minister, ended his frustrated 2018 letter. The Energy Ministry, Aliabadi and Mapna employees and managers contacted by Reuters did not respond to requests for comment.

The company has not publicly announced how much it spent in Syria or whether payments were settled.

The company sometimes received logistical help from Akbari, the Revolutionary Guards construction manager, internal letters show. This included asking IRGC units to allocate fuel for Mapna.

Mapna had partially repaired the Aleppo thermal plant by the summer of 2022. Assad triumphantly toured the plant in a photo op. Other projects were still in the works. The Jandar plant, damaged during fighting, operates at reduced capacity.

The Syrian engineer left the Latakia project in 2021 because he refused to work for the Assad-linked Syrian subcontractor because of the corruption, and viewed the project as doomed. “I’ve struggled to find permanent work since then,” he said. A member of the minority Alawite sect, he sheltered at home while the country plunged into new sectarian violence last month.

SANCTIONS AND DEBT

Mapna’s security and financial troubles were replicated across a host of other Iranian companies in Syria.

Copper World, a private Tehran-based electrical wiring firm, won a tender to supply a Syrian cable company just before the war. When fighting began, the investment looked shaky.

Rebels stole a cargo worth millions of dollars in Syria in 2012, a person with knowledge of the contracts told Reuters. Copper World pushed ahead in Syria because sanctions closed off other markets, the source said. Copper World claimed damages through Syrian courts and recovered some of the lost exports. The rest, due from the Syrian national insurance company, was never paid.

The source said the Syrian cable company demanded $50,000 as a condition for awarding Copper World a new contract – while doing the same deal with a rival Egyptian company. The two companies compared notes and discovered what was happening. Reuters could not determine how the deal was finalized.

On another occasion, a Syrian money-transfer company tasked with transmitting funds to Copper World used old rates for payments as the Syrian pound plummeted, leaving Copper World short.

“Bank transfers and currency fluctuations killed that business,” the source said.

A Copper World letter at the Iranian embassy sought Akbari’s help with its financial difficulties in Syria. The letter asked him to lobby the Syrian Central Bank and money-transfer company to pay $2.4 million due to Copper World.

A separate table of projects, outstanding payments and extra costs, annotated by Iranian officials, listed dozens of delays and payment issues for other firms.

Yet throughout the ordeals of Mapna, Copper World and others, Iran doubled down on its Syrian investment.

Iran signed a 2011 free trade deal with Syria, days before the Mapna kidnappings, focusing on industry, mining and agriculture. The government in Tehran issued Damascus a credit line worth $3.6 billion in 2013, and a second worth $1 billion in 2015, the first of a series of major loans to help the Syrian state pay for imports, including oil.

The United Nations most recently estimated Iran to be spending $6 billion a year in Syria by 2015. Iran has called estimates of its spending in Syria exaggerated, but not provided an official figure.

Iran and Syria signed a series of agreements between 2015 and 2020 aimed at Tehran recovering its debts. They included giving Iran land for farming, a licence to become a mobile phone operator, housing projects, phosphate mining rights and oil exploration contracts.

Reuters reporting found that several of those projects ran into similar difficulties related to sanctions, manpower and security with little income to show for their troubles. None of the companies involved responded to requests for comment.

Iran was meanwhile losing deals to other countries. Akbari’s Headquarters for Economic Development reported in its study that Syria’s other big ally, Russia, had focused on “profitable sectors” in the country such as oil and gas. And seven months after agreeing that Iran could manage the port of Latakia, Syria renewed the lease of a French company instead.

‘IDENTIFY THE SYRIAN MAFIAS’

Akbari and his bosses in Tehran were acutely aware of how little their Syria investment had yielded by the time the Iranian government announced his new post leading the development agency in 2022.

The study that references the Marshall Plan was produced on Akbari’s watch. It lists a litany of troubles Iran endured in Syria – banking and transport problems, “lack of security” and red tape.

It also mentions USAID, the American aid agency that Trump has been defunding . Like the Marshall Plan, the Iranians viewed USAID as a highly effective vehicle for establishing American economic and soft power – a “nation building” model they wanted to adopt in Syria. It would help Iran “achieve goals such as increasing regional security,” as well as “neutralize” US sanctions, the study said.

Without mentioning other countries in detail, it said Syria was on the “front line” of Iran’s battle with Israel, and a key link with Hezbollah in Lebanon. Iran’s regional soft power projects include charity and construction work in Iraq and funding for seminaries in Lebanon. This spending is an increasing source of criticism at home by Iranians reeling from its ailing economy.

By the time Akbari started his job, Assad had largely beaten back the uprising with Iranian and Russian help.

Iran had reaped some strategic rewards, deepening its influence in the Syrian military, developing local militias alongside those it imported into Syria, and deploying paramilitaries in key centers like Damascus, Sayyeda Zeinab and Aleppo.

But Iranian businesses were losing interest. After fighting subsided, just 11 Iran-linked companies registered annually in Syria in 2022 and 2023, barely more than during the worst years of the civil war, according to an analysis by the Syrian political economist Karam Shaar shared with Reuters.

“Syrian banks’ failure to pay Iranian companies is discouraging investment,” a letter from Akbari’s agency to Iran’s Syria ambassador read, listing a litany of complaints.

The agency blamed “complicated Syrian bureaucracy.” A Powerpoint presentation that lay next to the agency’s study at Iran’s embassy suggested a workaround: “becoming familiar with the key stakeholders and economic and business mafias” of Syria.

The agency assessed that sanctions would still stop Syria from doing business with the West, making Iran one of its few options. Others were Arab states and Turkey, which had rekindled relations with Assad after years backing his opposition.

Akbari pressed on. In a photo accompanying a printout of internal meeting minutes, he sits smiling opposite Syria’s industry minister at an Aleppo hotel. “Mr. Akbari asked the Syrian side to identify incomplete factories” for Iranian companies to build, the minutes read.

Iran signed new agreements with Syria in 2023 and 2024 that included establishing a joint bank, zero tariff trade, and a second attempt at setting up transactions using local currencies – a move that would avoid sanctions by cutting use of US dollars.

But time would soon run out on Akbari and his mission.

ROOT AND BRANCH REVERSAL

The scattered papers, belongings and military hardware left around the Iranian embassy in Damascus, a hotel for Iranian engineers and workers adjoining the Sayyeda Zeinab shrine, and a nearby cultural center, are a mix of contracts, plans, proselytising and military-industrial logistics.

Next to tomes on Islamic jurisprudence and a “knowing Shi’ism” book at the cultural center are applications by Iranian women for membership of Iran’s Basij paramilitary organisation. Among abandoned plans for shrine decorations, an Iranian worker at the nearby hotel was teaching himself Arabic in his personal notebook.

Despite the many problems, Iran was still pouring money into the upkeep of the Sayyeda Zeinab shrine. It was providing stipends for Iranian families who had moved to the area – according to Iranian documents seen at Sayyeda Zeinab – and maintaining militias nearby.

The fall of Assad last year brought down the curtain on Akbari’s Syria plan. By then, Israel had all but crushed Iran’s Axis of Resistance, killing the leadership of Hamas in Gaza, Hezbollah in Lebanon, and key IRGC commanders in Syria.

An Israeli strike in April 2024 flattened the consulate building attached to the Damascus embassy, leaving one less site for Syrians to pillage when Iranian embassy staff fled.

Abu Ghassan, a fighter for the new Syrian government, guarded the embassy in the days after Assad fell. He said he and his comrades found a pack of explosives hidden in a corridor and some empty ammunition boxes.

“Locals keep coming in looking for money or gold,” he said. “There’s nothing of value left.”