Three Seas Initiative Investment Fund

Three Seas Initiative Investment Fund

The Three Seas Initiative Investment Fund (3SIIF), or FIIT, as it is also known, was established in Luxembourg on May 29, 2019i. Its primary purpose is to provide commercial investment opportunities that support cross-border projects across Central Europe, focusing on three key areas: transport, energy, and digitalization ii. The Fund aims to facilitate and finance projects that promote regional growth and development by investing in these areas.

History and 3SIIF operations

The Three Seas Initiative Investment Fund was established with the aim of promoting economic growth in Central Europe through infrastructure development in the energy, transport, and digital communication sectors. The idea of creating a financial instrument for this purpose was first proposed in 2017 iii, and a letter of intent was signed in 2018 by representatives from six countries (Croatia, Czech Republic, Latvia, Poland, Romania and Slovakia). By 2024, funds had been received from nine countries (Bulgaria, Croatia, Estonia, Lithuania, Latvia, Poland, Romania, Slovenia and Hungary) and two private investors, although their identities remain undisclosed iv. Importantly, to this day the authorities in Prague and Bratislava have not decided to join the Fund.

The main investor and co-founder of 3SIIF is Bank Gospodarstwa Krajowego (BGK), a Polish development bankv. The establishment of the Fund was formalized with a letter of intent signed during the Three Seas Initiative summit in Romania in 2018. The Fund’s purpose, as confirmed in a declaration at the following summit in Slovenia in 2019, is to support infrastructure connectivity projects that will enhance the region’s prosperity and well-being, and strengthen investment and economic cooperation within the European Union vi. The investment process for 3SIIF is overseen by professional and independent entities, with Amber Fund Management Ltd from the UK serving as the sole investment advisor to the Fund vii.

In the words of the first vice-president of Bank Gospodarstwa Krajowego, Paweł Nierada:

“The Three Seas Initiative Investment Fund is a commercial fund that analyzes projects in line with the investment strategy previously agreed upon by the fund’s founders, which is, of course, strongly inspired by and based on the Three Seas Initiative. However, the Fund invests only in projects that have a guarantee and promise commercial success. Its long-term, strategic goal is to support the development of the economies of the region’s countries, in particular in the three main areas on which the Three Seas Initiative focuses, i.e. broadly understood logistics in transport, energy and digitality. All projects in which the Fund invests must have an impact on at least two countries from the Three Seas region. Nevertheless, the ultimate goal is for these investments to bring a return to those who contributed this money to the Fund. viii

Funds accumulated in 3SIIF

The Fund reached its full operational capacity in February 2020, following the signing of the first subscription agreements and the appointment of an investment advisor. BGK is the largest shareholder ix, with EximBank from Romania, Altum from Latvia, Rahandusministeerium from Estonia, Slovenska izvozna in razvojna banka (SID Banka) from Slovenia, EXIM, Bulgarian Development Bank (BDB), Hrvatska banka za obnovu i razvitak (HBOR) from Croatia, and Investicijų ir verslo garantijos (INVEGA) from Lithuania also investing significant amounts (EUR 20 million each) into the Fund x.

At a summit held in Estonia in 2020, BGK revealed plans to increase its contribution to the Fund. The new amount was set to be EUR 250 million, up from EUR 500 million previously. The total budget for 3FIIT was EUR 928 million, which included investments from major investors in nine Three Seas countries. These investors pledged a total of EUR 913 million. Two private investors also contributed, but their names and amounts were not disclosed xi. At a later summit in Latvia in 2022, Scott Natham, the president of the American DFC agency, announced plans for the institution to join the fund with a potential capital contribution of up to $300 million (approx. EUR 280 million) xii. After the Bucharest Summit in 2023, the USA finalized an investment in 3SIIF (in the form of a debt instrument) in the amount of USD 300 million xiii.

During a speech at a Foreign Affairs Committee meeting in July 2023, BGK’s President at the time, Beata Daszyńska-Muzyczka, reported that the fund had collected a total of PLN 928 million and completed five investments xiv. Initially, 3SIIF had a target budget of EUR 3-5 billion. In 2023, the Fund finished raising funds from investors xv

The summary of our investments in chronological order

1. Cargounit: In 2020, our Fund acquired 100% of shares in Cargounit, a regional leader in locomotive rental based in Poland. Cargounit is the only locomotive leasing company in the Three Seas region that can offer a complete range of locomotive types, and has extensive plans to modernize its fleet in the coming years. The expansion of operations will improve connectivity in the region, including the efficiency of transporting goods by rail xvi.

2. Greenergy Data Centers: In 2020, our Fund acquired a controlling stake in Greenergy Data Centers, a company dealing with the construction of the largest and most efficient data center in the Baltic region, located in Estonia. The Greenergy platform and its first data center will improve digital connectivity in the Three Seas region through a network of energy-efficient data centers.

3. Enery Development GmbH: Our Fund acquired a stake in Enery Development, which has solar power plants in three Three Seas countries, namely Bulgaria, Romania, and Austria. The company acquires, develops, builds, and operates renewable energy plants in Central Europe xvii.

4. BMF Port Burgas: Our Fund acquired a significant part of shares in BMF Port Burgas, the largest operator of the port in Burgas, Bulgaria. BMF Port Burgas is a private, multi-functional port operator, managing the Burgas East II and Burgas West terminals. Located in the Gulf of Burgas, along the Black Sea coast, BMF Port Burgas serves the closest deepwater port to the Bosphorus xviii.

5. R. Power: In February 2023, our Fund acquired a minority stake in R. Power, the largest company in the photovoltaics sector in Poland. R.Power operates in the entire value chain of the PV market – it develops power plant projects, builds them, and provides management, maintenance and operation services for photovoltaic power plants xix. Outside Poland, it develops photovoltaic projects in Portugal, Italy, and Spain xx.

According to information from the then President of BGK, the Fund’s contribution to the above investments amounted to EUR 781 million, while the total value of the entities in which the funds were invested exceeds EUR 6 billion xxi.

Three Seas Initiative and Three Seas Initiative Investment Fund

In the 2018 declaration issued at the conclusion of the Three Seas Initiative summit in Bucharest, the Three Seas Initiative Investment Fund (3SIIF) was mentioned for the first time in a document of such significance.

“The objectives of the fund have been defined, recognizing that it will be initiating, supporting and financing priority communication projects supported by the Initiative, as well as other past Three Seas projects. This provision requires clarification because it is one of the main sources of confusion around 3SIIF. The above-mentioned provision mentions the fund’s financing of “priority communication projects supported by the Initiative”. One could get the impression that the Fund would remain closely related to the so-called list of priority projects and will focus on them. Even if initially, at the stage of work on establishing 3SIIF, such intentions may have appeared, in the final form they were not treated as a priority. Projects from the mentioned list were taken into account and analyzed just like other projects not included in this list. The decisive criterion was profitability and compliance with the fund’s strategy xxii.

It is essential to note that the primary objective of the Fund is to engage in commercial activity and generate profits for investors, rather than to support significant infrastructure, energy, and digitalization projects in the Central European region. These tasks are mainly funded by the budgets of participating countries in the Three Seas Initiative, as well as funds obtained from the European Union. The estimated value of infrastructure investments needed in the region is EUR 650 billion xxiii.

In 2024, discussions began regarding another financial instrument that could meet the expectations of Central European countries xxiv. The Innovation Fund, which was initiated by Bulgaria and is also the reporting country, is a fund that was not announced at the Bucharest summit xxv.

The declaration from the 8th 3SI Summit included an encouragement to establish another investment fund. It is to focus on environmentally friendly infrastructure (green-oriented infrastructure) and projects in the area of renewable energy and digitalization (excluding transport). It is not known whether it will be possible to establish it before the next 3SI Summit in Vilnius scheduled for April 11, 2024 xxvi.

According to the Bucharest 2023 Declaration: “We acknowledge the existence of numerous attractive investment opportunities in the pipeline of the 3SIIF and the success of the initial investment fund. We strongly encourage the creation of a succeeding financial vehicle based on the success of its predecessor and other core sponsors of the 3SIIF to join, as a swift action to mitigate the macro-economic challenges in the region, directing investments into a focused green-oriented successor infrastructure fund and continuing to drive resources for the financing of such a vast pipeline of projects across the 3SI region. We also acknowledge the intention to launch a 3SI Innovation Fund that could address the rising needs for investments in cross-border innovative projects, deploy more investments in technological advancements and strengthen the innovation ecosystem of the whole 3SI region, in line with the European priorities for sustainable and technologically advanced economic transition.” xxvii.

i Per the former BGK President, the Fund was established in Luxembourg for two reasons. Firstly, it is the sole location where international projects are registered. Secondly, the bank aimed to draw in funds and global private investors. Financial institutions regard Luxembourg law as the most transparent. The above excerpt was cited from the Chancellery of the Sejm, Office of the Sejm Committee, Full transcript of the meeting of the Foreign Affairs Committee No. 143 of July 6, 2023,, [accessed: 18/01/24] page 9.

ii Official website of the Three Seas Initiative Investment Fund, Three Seas Initiative Investment Fund, 3siif.EU [accessed: 09/01/24].

iii A. Orzelska-Stączek, Three Seas Initiative Investment Fund: Origin and stages of development, Studia Polityczne 2023, vol. 51, no. 1. p. 134. See also: speech by Beata Daszyńska-Muzyczka, president of the management board of BGK SA, chairwoman of the supervisory board of the Three Seas Fund, at the meeting of the Foreign Affairs Committee (no. 32) on December 16, 2020, while considering the Information of the Minister of Foreign Affairs on cooperation under the Three Seas Initiative and projects implemented from the Three Seas Fund, she said: “Then there was a summit in Warsaw with the participation of President Trump. Warsaw was closed then, especially the city center. The bank building, located at Rondo de Gaulle, was also inaccessible and closed. It was a time of strategic rethinking for the board. Then an idea was born to support this important initiative for the entire region through financial institutions and development banks,” (access: July 1, 2023).

iv Three Seas Initiative Investment Fund, [accessed 09/01/24].

v Marta Gębska, Scenarios of development and macroeconomic security of the Three Seas Initiative countries since COVID-19, “Rocznik Institute of Central and Eastern Europe”, 18 (4), 2020, pp. 171-199, DOI: 10.36874/riesw.2020.4.8.

vi Joint declaration of the 4th Summit of the Three Seas Initiative (Ljubljana, June 5–6, 2019)

vii BGK, Three Seas Fund, [accessed 09/01/24].

viii Three Seas Initiative Research Center, What is the Three Seas Initiative Investment Fund, what is its origin and role? Prof. talks to Paweł Nierada, first vice-president of Bank Gospodarstwa Krajowego. Agnieszka Orzelska-Stączek, -vice-president-of-bank- Gospodarstwa-Krajowego-talks-prof-agnieszka-orzelska-staczek/ [accessed 24/01/24].

ix J. Wilczek, A. Rudowski, Three Seas Fund. Towards the institutionalization of the initiative?, 2021.

x Core Sponsors, , [accessed 10/01/24].

xi Chancellery of the Sejm, Office of the Sejm Committee, Full record of the meeting of the Foreign Affairs Committee No. 143 of July 6, 2023, , [accessed on January 18, 2024].

xii BGK, New investor and investment in the Three Seas Fund, , [accessed: 19/01/24].

xiii Ministry of Foreign Affairs, Three Seas Initiative, (accessed February 3, 2024.

xiv Chancellery of the Sejm, op. cit. p. 9.

xv Ministry of Foreign Affairs, Three Seas Initiative…

xvi J. Wilczek, A. Rudowski, Three Seas Fund. Towards the institutionalization of the initiative?, 2021.

xvii Enery, About us, [accessed 21/01/24].

xviii BGK, Record container volumes of BMF Port Burgas in the first half of 2023, [ accessed 19/01/24].

xix, the Three Seas Fund will acquire a minority stake in R.Power for EUR 150 million, [accessed on 19/01/24] -for-150-million-euro/

xx 3SIIF, R.Power raises €150 million investment and welcomes the Three Seas Initiative Investment Fund as a new investor, -three-seas-initiative-investment-fund-as-a-new-investor [access: July 1, 2023].

xxi Chancellery of the Sejm, Office of the Sejm Committee, Full transcript of the meeting of the Foreign Affairs Committee No. 143 of July 6, 2023, , [accessed on January 18, 2024], p. 9.

xxii A. Orzelska-Stączek, Three Seas Initiative Investment Fund…, p. 139.

xxiii If we want to have the same infrastructure – road, logistics and transport, energy and digital – we must spend PLN 650 billion by 2030. This is a huge effort and huge expenses, but also huge potential and opportunities for public, private and public-private investments. Course of the meeting of the Foreign Affairs Committee.

xxiv Proceedings of the meeting of the Foreign Affairs Committee Op. cit.

xxv M. Gołębiowska, Ł. Lewkowicz, The Three Seas Initiative after the Bucharest summit: southern enlargement and lack of further institutionalization, Central European Institute. [accessed 20/01/24].

xxvi Ministry of Foreign Affairs, Three Seas Initiative, (accessed February 3, 2024).

xxvii Three Seas Initative Research Center, Joint Declaration of the Eighth Summit of the Three Seas Initiative (Bucharest, 6-7 September 2023), [accessed 04/02/2024].