Funds the keys between the seas
The ‘Three Seas Initiative’, set up in 2016, has established itself as an umbrella under which 24 major logistics infrastructure projects in Central and Eastern European countries have been placed. Bulgaria, which holds the initiative’s presidency in 2021, is focusing its efforts on the financial basis of the projects. It wants to strengthen the associated Three Seas Initiative Investment Fund.
In these difficult times, when a viral pandemic has tempted many a European state to close itself off from its immediate and pan-continental neighbours and thus to simultaneously risk the rupture of supply chains, an initiative for cross-border cooperation seems anachronistic. In fact, the Three Seas Initiative (3SI) dates back to the year 4 BC19 (before Covid-19).
At that time, the presidents of Croatia and Poland initiated 3SI as a platform for those countries located between the Baltic Sea, the Adriatic Sea and the Black Sea, to jointly reduce the infrastructural backwardness of their region, compared to Western Europe, in the fields of transport, energy and digitalisation. Today, the Three Seas Initiative groups the twelve EU states of Austria, Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia together.
This year, Bulgaria holds the 3SI chair. The heads of state of the participating countries are scheduled to meet virtually in the Bulgarian capital Sofia for their sixth summit in June. At a parallel business forum entrepreneurs and stakeholders will meet to generate, if possible, investment commitments for the realisation of some of 3SI’s strategically-important projects.
Roussi Ivanov, Bulgarian president Rumen Radev’s foreign policy secretary, is the Bulgarian government’s 3SI representative. Ivanov said that “our chairmanship and our hosting of the next annual conference have been designed to act as catalysts to accelerate the realisation of the initiative’s fundamental goals in terms of the development of the region’s digital, energy and transport infrastructure.”
Around two dozen transport infrastructure projects are being pursued in the framework of 3SI, including multilateral initiatives. One of them is the ‘Via Carpatia’ motorway that will connect the Greek port of Thessaloniki with the Lithuanian city of Klaipeda from 2025 onwards. The Rail Baltica railway link from Warsaw to Tallinn is another; as is Fair Way Danube, an inland waterway navigation project.
Projects include national efforts too
In addition, there are bilateral as well as national projects of international importance too, such as an undertaking to upgrade the railway line between the Bulgarian cities of Russe and Varna; a project to modernise the bulk cargo terminal in the Croatian port of Rijeka; and an effort to construct a tunnel under the 1,444 m high Petrohan pass in Bulgaria, to facilitate road transport between the Greek border and the Romanian side of the Danube.
All these projects to improve the transport and logistics infrastructure between the Baltic, Aegean and Black Seas aren’t original 3SI plans; some of them already existed on paper long before the launch of the Three Seas Initiative in 2016.
3SI can contribute substantially to their accelerated realisation, however, so Ivanov hopes. He sees the Three Seas Initiative Investment Fund (3SIIF), which was initiated in 2019 by two commercial banks from Poland and Romania, as an important instrument to this end.
Three quarters of the countries that participate in 3SI are now directly involved in 3SIIF’s investment efforts, which are managed by the London-based Amber Infrastructure Group, in accordance with the principles of free-market economies. In February Croatia and Lithuania became the most recent governments to make financing commitments to 3SIIF. The collected assets ready for investment now amount to a total of around EUR 930 million.
3SIIF has financed two projects. The first one is the Green Energy data centre in Tallinn, designed according to environmental criteria; and the full acquisition in October 2020 of Cargo Unit, Poland’s largest private locomotive leasing company. It has 175 locomotives and is considered the market leader in Central Europe.
More supporters for the fund
Ivanov said that Bulgaria’s priorities during its 3SI chairmanship include “securing greater support for the investment fund from participating countries.” One of the fundamentals for these efforts is to achieve “greater transparency in the selection procedures for investment projects.”
The aim is to be able to present some results before the end of the year. Ivanov is convinced that “only results can increase the confidence of the participating countries and other stakeholders in 3SIIF and lead to more financial contributions from international financial institutions, including players from the private sector. We’re updating our selection processes for projects that can be most effectively financed by the fund, and are thus in transition from the political to the practical dimensions of the initiative.”
