22 July 2021
There are plenty of signs the Three Seas Initiative is finally ready to deliver on its ambitious promises in the next years. Yet, private investors should also give pause before committing to the project because of several risks related to institutional inexperience, fiscal uncertainty and political as well as geopolitical factors.
Five years on from its inception, the Three Seas Initiative (3SI) is gradually taking shape. The ambitious scheme to increase trade and connectivity of the North-South axis of Central Eastern and Southeastern Europe (CESEE) has sometimes appeared flaky, not least given its decentralised, intergovernmental structure.
Yet, at the 3SI summit in October, the Three Seas Initiative Investment Fund (3SIIF) received a boost. The United States pledged to provide 30 per cent of the combined contributions of 3SI states – which could be up to 1 billion euros – to fund transport, digital and energy infrastructure, while international financial institutions (IFIs) such as the European Investment Bank, the World Bank, and IDFC First Bank also announced their participation.
The 3SIIF estimates that the EU member states of CESEE require up to 530 billion euros in infrastructure investment through until 2030 – with an additional 270 billion euros needed for cross-border infrastructure. For now, it is seeking to raise 5 billion euros in state funding with a view to mobilising 100 billion euros in private investment.