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Market perspective: Christian Roy, Amber Infrastructure Ltd

Amber Infrastructure is a specialist infrastructure investment manager with 11 offices globally and c.GBP 9bn of assets managed, including over 50 projects taken through construction into successful operation.

Amber was appointed as the exclusive investment adviser to the Three Seas Initiative Investment Fund (3SIIF) in early 2020. The 3SIIF, established in 2019, is a dedicated commercial fund targeting a pipeline of investments in 12 European Union CEE member states located between the Baltic, Black and Adriatic Seas.

A key priority of the 3SIIF is to address connectivity issues within CEE countries. Reflecting on this matter, Christian Roy, an Investment Director at Amber Infrastructure, says, “From a historical perspective, the collapse of the Eastern Bloc in 1989 was followed by the development of East-West networks that served integration efforts and the creation of new supply chains with Western Europe. However, the North-South routes remained largely underinvested, despite the economic need for the creation of such infrastructure.”

Projects are well underway. The Fund’s first investment in October 2020 was the acquisition of ‘Cargounit’, the largest independent locomotive leasing company in Poland. The Polish rail freight market is the second largest in Europe, after Germany, and Roy expects the market to continue to grow, with a large-scale modernisation programme underway promoting connectivity both in Poland and within the wider CEE region.

The 3SIIF also made its first digital investment in November 2020, acquiring a controlling interest in ‘Greenergy Data Centers’, a CEE data centre platform. The first centre will be developed in Estonia and is expected to be the largest of its kind in the Baltic region with up to 20MW of capacity upon completion.

The availability of structural funds from the EU is anticipated to diminish in the long-term as the CEE region becomes more prosperous. Yet Roy believes the prospects for infrastructure investment across the CEE region are bright. “The EU member states of the CEE form one of the fastest growing regions in the developed world, offering the attractive combination of comparatively high GDP growth with strong indicators of regional stability. Infrastructure investment needs have been estimated at more than EUR 500bn to 2030. This suggests a significant opportunity for infrastructure investment both from public and private capital."

“The gap created by the reduction in funding from the EU will provide room for private sector investors to take advantage of investment opportunities due to strong demand for investments into infrastructure. In turn, this is expected to build a compelling investment case for institutional investors seeking long-dated, secure and diversified returns in one of Europe’s most promising geographies.”