US invests in energy and transport infrastructure in Central and Eastern Europe

The US International Development Finance Corporation (DFC) announced on Tuesday (16 July) its first investments into Central and Eastern European energy and transport infrastructure, as part of a wider €280 million funding commitment aimed at countering Russian and Chinese influence in the region.

As mentioned in the Three Seas Initiative Investment Fund press release, the investment will support energy and transport infrastructure projects to facilitate the green transition and contribute to energy security in Central and Eastern Europe, in line with the objectives of the region’s national governments and the US.

“We are working together to promote regional energy security and economic development, strengthen geopolitical ties and counter Russian aggression in Europe,” said Scott Nathan, CEO of the DFC, in the declaration concerning the first disbursement.

The investments were made via a funding agreement with the Three Seas Initiative Investment Fund (3SIIF) – a commercially-driven fund, backed by public banks, which invests in transport, energy and digital infrastructure in the twelve European countries that sit between the Baltic, Adriatic, and Black Seas.

The fund’s investment period runs until February 2026. The DFC has not specified which projects will benefit from this fund, nor how much has been invested.

The 3SIIF has already committed more than €800 million in nine Central and Eastern European (CEE) countries and has invested in projects, such as Cargounit, the largest supplier of locomotives in CEE, or in the Bulgarian port of Burgas, which has become a key hub for international trade in the region.

In the energy sector, investments were concentrated in R.Power Renewables, a photovoltaic company, and in Enery, a renewable project developer for Eastern Europe.

The 3 Seas Initiative

The fund operates in parallel with the ‘Three Seas Initiative‘ – a political forum of the same twelve CEE countries. Launched in 2016, the initiative aims to develop connectivity among these states, to strengthen their energy security and help them work together towards sustainability.

As former members of the Soviet bloc, these countries hope to bring the region up to international standards and close the gap with Western Europe on all fronts, especially the energy transition.

American investment

Having already raised nearly €1 billion in funds to invest, “sadly, the war in Ukraine has demonstrated the relevance of the initiative”, Christian Roy, head of Central & Eastern Europe at Amber Infrastructure Group, 3SIIF’s investment adviser and manager, told Euractiv.

The US is particularly interested in this cooperation among states in this region, because of its geographical proximity to Russia and its desire to turn economically towards the West.

This support spans different US administrations. Former president Donald Trump attended the 2018 Three Seas Initiative Business Forum in Warsaw, while more recently, Secretary of State Antony J. Blinken expressed his support for this cooperation in February 2021.

Chinese interests

American investment in the region is also motivated by the Chinese government’s interest in this part of Europe. Chinese investment funds have already purchased strategic infrastructure, such as the port of Piraeus in Athens in 2016.

With its New Silk Roads initiative, China is helping to meet CEE countries’ need for infrastructure investment, but critics argue that  this outreach is underpinned by the aim of gaining influence in the region.

[Edited by Donagh Cagney/Zoran Radosavljevic]

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