The Three Seas Initiative stands at an inflection point
In 2016, twelve European Union (EU) member states launched the Three Seas Initiative (3SI) to accelerate the development of cross-border energy, transport, and digital infrastructure in the region between the Baltic, Adriatic, and Black Seas. This innovative effort, involving eleven EU members from Central and Eastern Europe as well as Austria, aims to leverage the power of private capital and the region’s economic potentials to address a trillion-dollar regional infrastructure shortfall that is largely an enduring legacy of the Soviet Union’s nearly five-decade domination of Central and Eastern Europe. The initiative envisions expanded and modernized infrastructural connectivity to accelerate regional economic growth, strengthen economic resilience, reinforce military security and, above all, complete the vision of a Europe that is undivided, secure, prosperous, and free.
The Three Seas initiative and its annual summits and business forums have become an established vehicle for regional engagement and collaboration. In 2023, Greece became the thirteenth state to join the initiative, adding significantly to the region’s geoeconomic weight, and Ukraine and Moldova became associate members. However, to fulfill its ambitions, the initiative must become a more institutionalized undertaking and refocus on its core objective of leveraging private capital to drive cross-border infrastructural development.
Rationale and objectives of the Three Seas
In 1989, Central and Eastern Europe emerged from the Cold War burdened with a dearth of national and regional infrastructure caused by decades of Soviet occupation. In contrast, post-World War II Western Europe embarked upon a historically unparalleled effort of reconstruction, development, and economic integration that placed significant emphasis on cross-border infrastructure. Today, Western Europe features a spiderweb-like lattice of cross-border highways, railroads, canals, pipelines, powerlines, and digital grids. This cross-border lattice has been a powerful driver of connectivity, economic growth and resilience, and military security—the latter including even a network of NATO energy pipelines and transport corridors intended to facilitate the rapid movement and sustainment of military forces against potential Soviet aggression.
Today, while much national and EU investment has expanded and modernized Central Europe’s cross-border infrastructure, the gap between this region and Western Europe remains significant. In 2020, the International Monetary Fund estimated this gap to be as much as 1.15 trillion euros ($1.19 trillion). According to the European Commission, road and rail traffic in Central Europe takes two to four times longer than comparable travel in the rest of the EU. This infrastructure deficit has real consequences. While the region has featured enviable growth rates, its underdeveloped infrastructure limits cross-border connectivity, acts as a break on economic growth, weakens economic resiliency, and restricts NATO’s ability to move forces rapidly, especially on a north-south axis to defend its eastern frontiers.
To address this infrastructure gap, Croatian President Kolinda Grabar-Kitarović convened twelve Central and Eastern European EU member states from between the Baltic, Black, and Adriatic Seas in 2016 to launch the Three Seas Initiative. The objective of this summit in Dubrovnik, Croatia, was to jointly attract investment for cross-border transport, energy, and digital infrastructure development. It laid the groundwork for the initiative’s strategy and its role as an “informal platform for security political support and decisive action of specific cross-border and macro-regional projects of strategic importance.”
The objectives have been clear ever since. First, the initiative seeks to leverage the power of cross-border infrastructure to stimulate and sustain regional economic growth. Greater cross-border connectivity fosters greater cross-border collaboration, including the more efficient movement of goods and services within the region, between the region and Western Europe, and between the member states and global markets. All this promises to further enhance the region’s attractiveness to foreign investment and would enable Central Europe to play a greater role in the European market.
A second objective is to tap the power of cross-border connectivity to strengthen economic resilience. This has become a growing imperative in an era of geopolitical turbulence—particularly due to intensifying Russian aggression and Moscow’s repeated efforts to leverage trade embargoes, particularly on its energy exports, to pressure its neighbors in Europe. By developing robust infrastructure in Central Europe, the initiative fosters greater economic independence—for example, by facilitating the diversification of energy supplies through new energy corridors to reduce dependence on Russian oil and gas.
A third, less prominent objective is strengthening the region’s military security. During the era of Soviet control, Moscow developed a limited set of energy, rail, and highway corridors—such as the Druzhba pipeline or rail corridors connecting Moscow to Prague or Budapest—on an east-west axis across Central and Eastern Europe, but next to none on a north-south axis. Expanding cross-border infrastructure in Central and Eastern Europe is critical to enhancing NATO’s ability to deploy and sustain its forces in the region, particularly those that must operate and move along the Alliance’s eastern frontiers. The joint declaration emerging from the 2024 Three Seas Summit reiterated this point.
“In the context of Russia’s unprovoked, unjustified and illegal war against Ukraine, we highlight the urgency and strategic importance of accelerating 3SI efforts in building resilient infrastructure and enhancing connectivity, in particular on the North-South axis, to contribute to greater convergence within the EU, redirection of transportation routes and supply chains, and the strengthening of overall 3SI security and prosperity.”
Defining 3SI’s work is a steadfast commitment to transatlanticism, with member states repeatedly stating that a core objective is contributing to the economic strength and security of the Euro-Atlantic community. Highlighting this commitment, the 2018 Bucharest Summit stated that the Three Seas Initiative is “confident that the economic presence of the United States in the 3SI region can contribute to the strengthening of the transatlantic link and provide an additional catalyst for an enhanced transatlantic partnership.” From the other side of the Atlantic, every Three Seas Summit and Business Forum has featured active US government participation, including President Donald’s Trump’s attendance in 2017 and President Joe Biden’s video address to summit leaders in 2021.
As noted earlier, the core and distinguishing objective of the 3SI has been its effort to leverage the power of private capital to catalyze the region’s infrastructural development. The countries of Central and Eastern Europe have always been grateful for the billions of dollars of international financing, particularly from EU institutions, that have been directed to their region to develop transport and other infrastructure. Yet, even with that assistance, infrastructure development has failed to progress with sufficient speed.
The initiative aims to leverage the region’s economic potential and vitality to attract private-sector capital to complement, expand, and accelerate its infrastructure efforts. Toward that end, the Three Seas Initiative Investment Fund was established in 2019 with nearly $1 billion in member state contributions. The fund can only invest in energy, transport, and digital infrastructure opportunities involving at least one 3SI member state. It is structured so that its investment decisions are made on a purely commercial, profit-oriented basis, and are isolated from the political influences of the governments that have contributed to its pool of capital.
Robust economic foundations
The initiative’s prospects for success rest on the robust economic strengths, performance, and potential of the Three Seas region. 3SI’s thirteen member states make up more than one-quarter of the EU’s population, with 120 million citizens and a highly skilled workforce. The region’s cumulative gross domestic product (GDP) totaled roughly $2.4 trillion in 2024 and is projected to grow by another 30 percent by 2030. Perhaps most critically, the 3SI region boasts some of the highest rates of return on investment (ROI) in Europe, reaching an average of 8.7 percent in 2022 compared to the EU’s average of 6.3 percent, making the region highly attractive to foreign investors.
Achievements over the first nine years
The strengths and potential of the Three Seas Initiative are rooted in the power of economic collaboration. Acting alone, each member state is limited in its ability to attract capital but, operating together, the Three Seas states can leverage their combined populations, economies, and growth potential. This, in turn, allows the bloc to generate a significant collective geoeconomic mass, which should be capable of attracting substantial interest from private- and public-sector capital around the world. Toward this end, the initiative has made notable progress since its launch nine years ago in raising awareness, support, and investment from members and partners within the region and beyond. These successes include the following.
The Three Seas Initiative Investment Fund
The Three Seas Initiative Investment Fund, while not yet accomplishing all its objectives, has made remarkable progress that affirms the high rates of return the region offers investors. Poland’s development bank (BGK) and Romania’s Export-Import Bank signed a letter of intent rolling out the concept for the Fund in 2018, and it was launched in 2020 with United Kingdom-based Amber Infrastructure Group serving as the Fund’s investment adviser. Nine of the 3SI member states have invested just under $1 billion in the Fund, and the United States Development Finance Corporation has committed to a $300-million financing agreement to support its investments. The Fund has committed more than €800 million across nine countries, contributing to the economic growth and diversification of the region. This has included investments in:
- Cargounit, a Polish locomotive leasing business that is the largest independent rolling stock company in Poland and the second-largest rail freight market in Europe;
- Greenergy Data Centers, the largest and most secure data center serving the Baltics;
- Enery, an Austrian-headquartered renewable energy platform with projects in the Czech Republic, Slovakia, Bulgaria, Austria, Romania, and Estonia;
- BMF Port Burgas, a Bulgarian port that has grown to become a key trade hub on the Black Sea as part of the Trans-European Transport Corridor; and
- R.Power Renewables, a Polish renewable energy developer working throughout the region to promote the solar-as-a-service model.
The Fund is notable for the financial commitments of its member states, its ability to attract significant US investment, the success of its structure in excluding political interference in its investment decision-making process, and its annual rate of return said to approach 15 percent, which is testimony to the lucrative character of infrastructure investment in Central and Eastern Europe.
Establishing the Three Seas Initiative as a regional forum
Over the past decade, the Three Seas Initiative has become an established forum convening member states’ top governmental, business, finance, and opinion leaders and their counterparts in Western Europe, North America, and beyond. Three Seas summits have convened annually since 2016, attended by member heads of state and top officials from the United States, Germany, the European Union, and other key Three Seas partners.
In 2017, Trump, attending the second Three Seas Summit in Warsaw, suggested the creation of a parallel Business Forum that would bring international business and financial leaders to the region. He is said to have quipped, “If this is about business, where are the business leaders?” Since then, the Three Seas Summits have been complemented by a Three Seas Business Forum that facilitates engagements between heads of state, government ministers, and business executives. These forums have featured sessions on each pillar of the Initiative, as well as topical issues such as investment in the region, partnership with Ukraine and Moldova, regional economic resilience, and sustainable development.
Because the initiative was intentionally established as an informal venue for regional cooperation without a formal institutional structure outside the Fund, there is no formal organization or office to support its activities. Coordination of summits, their agenda, and deliverables have been facilitated by sherpas appointed by presidents and heads of state, who often work in collaboration with their national governments. As a result, 3SI summits and business forums have served as the primary driver of Three Seas activities.
Developing international awareness and interest
The annual summits have received high-level participation from 3SI countries, partner countries, the private sector, and beyond, providing a tangible sense of interest from foreign partners. In addition to Trump, key participants from outside the region have included then US Secretary of Energy Rick Perry; then President Jean-Claude Juncker of the European Commission; President Frank-Walter Steinmeier and former Foreign Minister Heiko Maas from Germany; and President Volodymyr Zelenskyy of Ukraine. In 2024, the summit welcomed leaders from Japan, which joined as a partner country. Engagement with economic leaders such as the United States, Germany, and Japan has underscored the initiative’s legitimacy, as well as provided tangible commitments to the 3SI. From the international community, summits have included participants from the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund, and other organizations.
Outside the summits, the 3SI has demonstrated an ability to attract interest from its partners and turn it into commitments. Notably, in 2020, the United States pledged to provide up to $1 billion to the initiative, which became tangible in 2023 when the US Development Finance Corporation finalized the deal for a $300-million financing agreement. While high-level US leaders had attended summits and engaged with the 3SI in its earlier years, this step to direct investment marked a major success for the initiative and the Fund.
Expansion to Greece
At the 2023 summit in Bucharest, the 3SI welcomed Greece as a full member of the initiative. Greek interest in joining demonstrates the initiative’s attractiveness, providing a positive signal to investors. More importantly, Greece brings significant geoeconomic and political weight to the 3SI as the fifth-largest economy in the region, behind Poland, Romania, Austria, and the Czech Republic. Having recovered from its debt crisis, Greece has maintained strong growth rates since 2017 (aside from 2020 due to the COVID-19 pandemic) and strong rates of return on investment, making it an ideal fit for the 3SI. The Economist highlighted Greece’s success by naming it country of the year in 2023 for its work overcoming the debt crisis. Furthermore, the country has made significant investments in green energy, which pairs well with 3SI goals to develop critical energy infrastructure and promote greater energy security. Playing into Greece’s suitability for the 3SI, the country has emphasized its determination to link itself and the region to global infrastructure networks, including through links to both the Middle East and the Indo-Pacific regions through the India-Middle East-Europe Economic Corridor.
Building robust relationships outside the Three Seas countries
In addition to Greece, the 3SI has cultivated broader interest in joining the initiative among neighboring countries. Since Russia’s full-scale invasion of Ukraine prompted calls for its deeper integration into Europe, Ukraine has become a prime candidate for 3SI membership. The 3SI’s market-driven approach and focus on harnessing private capital resonates with many looking ahead to Ukraine’s reconstruction. Due to the initiative’s goal of developing modern infrastructure to connect Europe’s eastern front, some argue that Ukraine and its neighbor Moldova must be integrated into the Three Seas to enhance their security and to complete a Europe whole and free. Ukraine and Moldova made progress on their paths toward the 3SI at the 2023 Bucharest Summit, where they received associate membership. On the southern flank of 3SI, countries in the Western Balkans have expressed interest in joining but will face similar hurdles. Though their membership is not imminent, the perception of the 3SI as a useful forum, both politically and infrastructurally, is critical in building interest in the initiative.
The path to Three Seas 2.0
As the Three Seas Initiative approaches its tenth anniversary, it has presented, but not fully operationalized, an innovative approach to the development of regional infrastructure. It has become an established brand in Central Europe, if not across the transatlantic community. Its summit and business forums are part of the fabric of regional governmental and business convenings, and its investment fund has underscored the profitability of infrastructure investment in the Three Seas region.
Building on these successes, the Three Seas Initiative should do the following to fulfill its founding ambitions and to become a model of regional infrastructure development that would resonate globally.
I. Stand up a secretariat. To set the 3SI up for success, the member states should establish a full-time secretariat or office to shift the initiative’s operations from an iterative summit-to-summit basis to one on a full-time, 24/7 basis. The functions of this small office would be to
- serve as a repository of information about the Three Seas region and its infrastructure investment opportunities;
- facilitate contacts and engagements between potential investors and key regional stakeholders regarding these opportunities;
- market the initiative to potential foreign investors;
- represent the 3SI at various governmental, finance, and infrastructure convenings around the world;
- assist in orchestrating annual summits and business forums, as well as other events to drive the initiative’s agenda; and
- develop and propose initiatives that would increase the attractiveness of the Three Seas region to investment.
To accomplish these objectives, this office should be in a financial capital that is outside of the region. This would facilitate better engagement with foreign stakeholders, including governmental partners and investors. Brussels would be a natural fit due to its important role in European governance and finance, as well as its proximity to Central Europe and accessibility to other European financial hubs.
II. Reinvigorate a focus on mobilizing private capital. The 3SIIF and its intention to leverage private capital to drive regional infrastructure development is one of the most innovative elements of the initiative. However, aside from Amber Infrastructure’s own investment of some $10 million, the Fund’s investment capital has so far been derived almost entirely from treasuries of the member states and the US government. While seeking governmental funds remains important, it also makes sense to take stock of lessons learned since the Fund’s conception by the development banks of Poland and Romania and why the structure was not successful in attracting private capital; appropriate steps should then be taken to restructure it accordingly or to launch a new fund that will have greater success in this regard. The Fund’s current high rate of returns serves as ample proof that, if properly configured, it will have enormous potential to attract commercial capital. This, combined with the region’s infrastructure deficit and projected long-term high growth rates, should reinforce confidence in the prospects for success of both the Fund and the initiative.
III. Deliver a project. To add to its momentum and enhance its credibility to governments, intergovernmental institutions, and financial entities beyond the member states, the 3SI needs to complete a tangible infrastructure project. More specifically, the 3SI needs to undertake a project that it initiated and financed, demonstrate that it can provide an attractive return, and show the initiative’s geopolitical importance. An example of such a project would be an electricity powerline or a data transmission line, which are cheaper and more easily built than a large-scale highway, pipeline, or rail line. These projects would also have more immediate geoeconomic impact and return.
IV. Offer Ukraine full membership. Fundamentally, the goal of the Three Seas is to complete the vision of a Europe that is undivided, integrated, prosperous, free, and secure. That vision will not be completed until Ukraine is a fully integrated member of Europe and the transatlantic community. Toward that end, Ukraine should be offered full membership in the Three Seas Initiative and priority effort should be directed to new and preexisting infrastructure projects that deepen Ukraine’s infrastructural integration into the Three Seas region.
Russia’s 2022 invasion of Ukraine and the immense economic destruction it has caused make this a moral and strategic imperative for the Three Seas region. It is a moral imperative to assist a neighboring democracy that has been so unjustly and brutally attacked, and a strategic imperative in the effort to secure Central and Eastern Europe from further aggression. Ukraine’s reconstruction will stand among this century’s most challenging and urgent economic undertakings, and geography and a shared history ensure that the Three Seas states will play a pivotal role in this effort. The Three Seas Initiative should play a leadership role in the infrastructure dimension of Ukraine’s reconstruction and European integration.
Ukraine’s accession to the Three Seas Initiative would require the abandonment of an informal but long-standing Three Seas principle that only states that are full members of the EU can attain membership. This requirement was set with the belief that EU membership brings a level of political stability necessary to attract significant investment. However, investment in Ukraine following the full-scale invasion has disproven this theory, suggesting that investors are willing to accept higher risk for greater impact and potential return. As Ukraine eyes reconstruction, the initiative will have new opportunities for greenfield infrastructure projects if it incorporates Ukraine and prioritizes integrating it into the region’s preexisting infrastructure.
Even without full 3SI membership, the initiative needs to find opportunities to link Ukraine to the infrastructure network it seeks to build. As the 3SI looks for a project it can deliver to demonstrate the initiative’s geopolitical and geoeconomic relevance, how to include Ukraine should be a top priority.
V. Think bigger. The 3SI’s potential expands beyond the thirteen countries that are currently members. With its broader goal being to firmly tie Central and Eastern European countries to Europe and secure the region from Russian influence, the initiative should consider expanding to countries in Europe’s neighborhood, including the Western Balkans and Moldova. Not only would these countries stand to benefit greatly from tangible efforts to integrate their infrastructure into Europe’s, but 3SI would also help to block unwanted Russian and Chinese influence from the region.
The road to success
The Three Seas Initiative is a historic demonstration of the strategic value that Central and Eastern European democracies bring to the transatlantic community. Immediately after the Cold War, the region was highly dependent on foreign assistance. Today, the initiative is an important demonstration of how the region is leveraging its own geoeconomic capacity, leadership, collaboration, and potential to create economic opportunity and strength—not only for its member states but for the transatlantic community as well. A Central and Eastern European region that is more integrated into a wider Europe will be a more prosperous and secure area. That is a positive return for the region, Europe, and the United States.
It is time to fully leverage the economic potential of the Three Seas region and fulfill the ambitions of this initiative. With a critical summit in Poland in spring 2025, the initiative has an opportunity to demonstrate what it can achieve and to attract greater buy-in from partners and investors alike, working toward realizing the ultimate goal of a completed Europe.
About the authors
Related content
Explore the program
The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.
Image: Katowice , Poland. October 20, 2024: PKP. Modernization of the E65 railroad line. Reconstruction of the viaduct over Graniczna Street. Investment from european funds.