BGK: The Three Seas Fund attracted 10 investors, EUR 1 billion of capital in two years

by   CIJ News iDesk III
2021-07-21   14:19

The Three Seas Fund attracted 10 investors, gathered nearly EUR 1 billion in capital and carried out three infrastructure investments in the two years of its existence, Bank Gospodarstwa Krajowego (BGK) reported. All investments are cross-border and aim to improve infrastructure on the North-South axis.

According to BGK estimates, the target size of the Three Seas Fund will amount to EUR 3-5 billion.

"Despite the pandemic, we made our first investments within a very short time since the Fund was established. The first one in October 2020 and the last one in May this year. The Fund's strategy provides for investments in three areas: transport, energy and digital infrastructure. It is very important that each investment concerns more than one country. We adopted this assumption in the Fund's investment strategy. I am convinced that thinking in this way - about the region as a whole [...] we are able to do much better, more effectively respond to the needs of our countries in this part of the European Union," said Beata Daszyńska-Muzyczka, president of BGK and the chairman of the supervisory board of the Three Seas Fund.

As indicated in the communication, the infrastructure connecting the northern and southern countries (from Estonia to Croatia) has many backlogs. This significantly reduces the region's competitiveness and prevents the full use of the geographical potential of being located between the three seas - Adriatic, Baltic and Black.

In May this year, the Fund made its first investment in the energy sector and acquired shares in Enery Development GmbH. The company has solar power plants in Romania, Bulgaria, the Czech Republic and Slovakia. Thanks to the funds raised, Enery will invest over EUR 1 billion in the energy transformation of the Three Seas Initiative, it was also reported.

The investment in the digital infrastructure sector is the construction of the largest and most energy-efficient data center in the Baltic region. The project is carried out by the Estonian company Greenergy Data Centers, whose digital solutions will be available even to 12 countries in the region.

The Fund's first investment in the area of ​​transport is Cargounit - the leader of the locomotive rental market, based in Poland. The company plans to expand its operations to several countries in the region, which will reduce transport costs in the Three Seas countries.

"We plan that the target size of the Three Seas Fund will amount to EUR 3-5 billion. Currently, 10 investors are involved in the Fund, most of them are regional development banks, and there is also the first private investor. We hope that there will be more and more private funds. from the United States, Japan, Korea, Australia and Canada," added Daszyńska-Muzyczka.

As indicated, the Fund's financial advisor has identified over 180 infrastructure projects so far.

The Three Seas region is a significant part of the European Union and has well-developed trade links between the countries. The region generates nearly 14% of the GDP of the entire European Union and covers 30% of the territory of the Community. Every fourth EU citizen lives in this area, it was noted.

The Three Seas Fund is a commercial project - in addition to strengthening cooperation between countries and improving infrastructure in the region, the Fund's goal is to bring profit to investors. A crisis caused by a pandemic may affect changes in global supply chains and allow you to better position yourself in global markets. To achieve this, the Three Seas countries should already increase their investment in infrastructure.

Source: BGK and ISBnews