On 1 November 2023, a pivotal but somewhat overlooked meeting took place in Poland, marking a significant step forward for the Three Seas Initiative (3SI). Beata Daszyńska-Muzyczka, Ambassador and Special Representative for the President of the Republic of Poland for the 3SI, convened at the Presidential Palace with Agnes Dasewicz, Director of Operations at the U.S. International Development Finance Corporation (DFC). This rendez vous saw discussions veer towards bolstering investment engagement within the region and exploring innovative financing mechanisms for cross-border projects within the ambit of the Three Seas Initiative. What is important is that the representatives from the United States reaffirmed their commitment to continuing their support for the Three Seas format.
Tallinn Summit 2020 – a breakthrough
The backdrop to this meeting is rooted in a longstanding commitment by the United States to support the Three Seas Initiative. At the Tallinn Summit in October 2020, Keith Krach, U.S. Under Secretary for Economic Growth, Energy, and the Environment unveiled plans for the DFC to invest a substantial USD 300 million toward the 3SI Investment Fund (3SIIF), marking a significant 30 percent contribution to the Fund at that juncture. The formal decision to ratify this investment of USD 300 million was officially sanctioned during this recent meeting.
What makes this commitment even more substantial is the U.S.’s agreement to expand its pledge to a staggering USD 1 billion, aligning with the 30 percent principle. This signifies that as investments snowball to approximately USD 3.4 billion, the U.S. contribution will scale up to a commendable $1 billion.
U.S. International Development Finance Corporation
DFC’s extensive investment portfolio, exceeding USD 37 billion committed globally, accentuates its commitment to less-developed countries, with a specific focus on critical infrastructure and adherence to elevated standards aimed at advancing economic and social development.
The 3SI Investment Fund
The 3SIIF, operating as a commercially-driven investment vehicle, focuses on financing crucial infrastructure projects spanning transport, energy, and digital domains along the north-south axis in the Three Seas countries. Its pivotal goal is to bridge developmental gaps within the European Union’s different regions while complementing and fortifying the capital deployment facilitated by individual Three Seas countries and E.U. financial instruments.
The involvement of the U.S. International Development Finance Corporation (DFC) marks a significant alliance in realizing these objectives. DFC’s partnership with the private sector forges pathways to finance solutions addressing critical challenges in the developing world, spanning sectors like energy, healthcare, infrastructure, and technology. Moreover, their commitment extends to empowering small businesses, aiming to generate employment in emerging markets while upholding high standards respecting the environment, human rights, and worker rights.
The agreement made at the Riga Summit in June 2022 between the U.S. International Development Finance Corporation and the Three Seas Initiative Investment Fund S.A. SICAV-RAIF (3SIIF) outlined a term sheet forming the foundation for an agreement where DFC will provide up to USD 300 million (approximately USD 280 million) to the Fund. This financial infusion from DFC was earmarked to bolster energy and infrastructure investments, thereby enhancing energy security, promoting diversification, and fortifying connectivity across the Three Seas region.
Back to the 2023 meeting in Poland
The meeting of representatives from DFC and 3SIIF in Warsaw bodes well for the success and further development of the Three Seas Initiative project. Clearly, these are preliminary discussions aimed at determining the most optimal directions for action and areas of investment. This meeting also demonstrates that the Three Seas project is gaining strategic significance, perhaps even more so than both interested parties, Poland – representing already 13 states of the Initiative (after Greece’s joining) – and the United States show. Time will tell.