By Policy Intern Kay Minkiewicz
In 2019, the Three Seas Initiative Fund (3SIF) was created to finance infrastructure projects in Central and Eastern Europe between the Baltic, Black and Adriatic seas. The fund aims to develop three sectors in the region: transport, energy and digital infrastructure. Through this development, the fund aims to offset the imbalance in infrastructure in the region that historically has been exploited by Soviet subjugation. Whilst also benefiting from the current undervaluation of the region as Damon Wilson, an American foreign policy advisor and the current Executive Vice President at the Atlantic Council has highlighted EUR 500 million (approx. USD 545 million) has already been raised by Poland and Romania. A further EUR 4.5 billion (approx. USD 4.9 billion) is set to be raised to generate approximately EUR 100 billion (approx. USD 109 billion) worth of investment. In February of 2020, US Secretary of State Mike Pompeo announced that the US would pledge up to USD 1 billion towards the region, either directly through or along the fund. While countries are participating as investors, the decision making process of the fund has been modeled on the Marguerite Fund created by the five largest development banks in Europe – BGK, KfW, CDP, ICO, CDC, and the EIB under the aegis of the European Commission to finance infrastructure and energy investments in individual countries the EU. Therefore, the fund makes decisions independently and according to economic considerations, financing only profitable projects and not issuing non-refundable grants.
In April of 2020, Estonia announced that it’s joining the fund with a EUR 20 million (approx. USD 21.9 million) investment. Estonia is an important geopolitical ally to the three seas countries and the USA as it borders Russia and the Baltic Sea. Furthermore, Estonia’s decision to join the fund also carries historical significance to other countries also thinking of joining the fund that in the past have been under Soviet influence. Therefore, Estonia’s decision to join is an important step in cooperation with the USA, three seas countries, and central and East European countries.
The fund is part of the wider Three Seas Initiative (3SI) started in 2015. Founded by Poland and Croatia, the 3SI is an informal Presidential platform which provides for strong and sustained political support to foster more effective cooperation between member states, which will facilitate the realisation and development of mutually beneficial projects in the area. Therefore, maximizing the strong points that this overarching area is equipped with in order to further modernize and to increase the competitiveness of the states contributing to it. The current members of the 3SI are Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The next 3SI summit is set to take place in Tallinn, Estonian on October 19 and 20, 2020. Organising the summit in Tallinn will further enhance Estonia’s cooperation with the Three Seas countries as the Estonian foreign minister Urmas Reinsalu said, “Organizing the summit and business forum in Estonia is an excellent opportunity to enhance cooperation with the Three Seas countries.”
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Kay Minkiewicz is a Policy Intern at the Polish American Congress and a first-year student at The London School of Economics and Political Science, where he is majoring in Philosophy and Economics.