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Pension Funds are the right investors for infrastructure in South East Europe

12 September 2023
General Interest

South East Europe will need to convince pension funds and private capital in the region to invest in its infrastructure, said Joe Philipsz, Head of The Three Seas Initiative Investment Fund at Amber Infrastructure Group. “The region is fundamentally attractive for investors and it needs to back itself by getting pension funds and private investors to invest and that’ll bring in overseas capital as well”, he said.

The Three Seas Initiative Investment Fund’s purpose is to deliver the mechanism to find finance and invest in building and operating regional energy, digital and transport infrastructure. To achieve this objective, the private and public sector have to work together. “There’s a lot of clarity as to what is needed but then you need partnership – this includes the use of both public and private capital”, he added.

The Three Seas Initiative Investment Fund is present in Romania via Enery and RPower, both with significant renewable energy development projects. It is also present in the railway infrastructure sector by providing locomotives to Romanian rail transport operators via Cargounit, the largest locomotive leasing company in Central and Eastern Europe.

Although private capital for infrastructure is lacking, there is a clear  opportunity to deliver “attractive returns” for the investors active in infrastructure due to the strong fundamentals such as GDP growth which is better than the rest of the European Union.

The region needs global capital invested in its infrastructure but needs the regional pension funds to do the same. Today infrastructure globally is heavily invested by pension funds. In order to get international investors to provide capital in the region you also need local investors to show commitment to their own home markets. Also, as a matter of public policy, providing ownership in the local long-term infrastructure to the people who live in a country is important.

“There is virtually no investment in infrastructure by pension funds in the region compared to anywhere else in the world and that needs to change. We’re hoping that we can use the Three Seas Initiative Investment Fund as a way of demonstrating to local pension funds that investing in infrastructure can deliver attractive returns”, Philipsz added.

The head of The Three Seas Initiative Investment Fund from the Amber Infrastructure Group was one of the guests in a top-level conversation on the financing opportunities and projects that the Romanian energy sector presents within the remit of the Three Seas Initiative, in a side-event organized by Energynomics and the Romanian Energy Center Association in the margin of the 8th Three Seas Initiative Summit in Bucharest.

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