The World Bank said it had cleared Syria's $15.5 million in outstanding debt after receiving payments from Saudi Arabia and Qatar, making the country eligible to apply for millions of dollars in grants for reconstruction and budget support.

Saudi Arabia and Qatar said in April that they would cover Syria's arrears with the multilateral development bank, which will make it eligible for new grant programs, subject to the bank's operational policies.

The step follows a surprise announcement by US President Donald Trump that he would order the lifting of all sanctions on Syria, which is struggling to rebuild after 13 years of civil war. The United States is likely to begin providing some sanctions relief in the coming weeks.

As of May 12, Syria has no outstanding balances with the International Development Association, the bank's fund for the poorest countries, the World Bank said.

"We are pleased that the clearance of Syria’s arrears will allow the World Bank Group to reengage with the country and address the development needs of the Syrian people," the bank said in a statement. "After years of conflict, Syria is on a path to recovery and development."

The bank said it would work with other countries to help mobilise public and private financing for programs that can help the Syrian people build better lives, stabilising the country and the region.

It said its first project with Syria would focus on access to electricity, which would enable economic progress and aid the delivery of essential services, from health and education to water and livelihoods.

"The proposed project is the first step in a planned increase in World Bank Group support designed to confront Syria’s urgent needs and invest in long-term development," the bank said.