## 2 Comparison of BRI with Other Global and Regional Infrastructure Initiatives
### Investment Policy Orientation
The focus areas include energy, transportation, and digital infrastructure, specifically enhancing North-South connectivity. Each eligible infrastructure project, whether a new development(greenfield) or expansion of existing facilities (brownfield), is expected to be construction-ready and deliver substantial benefits to at least two regional states. Managed on a fully commercial basis, the fund operates with a transparent investment process independent of its shareholders and anticipates a high internal rate of return between 12 and 15%, reflecting the Three Seas region's unique position at the intersection of emerging market dynamism and developed market stability. The U.S. has shown interest in supporting the fund through the DFC, pledging to contribute no less than 30% of the total commitments from the 3 SI states. The initial investment has a potential multiplier effect by being positioned to complement EU or national funds, draw additional equity investments, and stimulate lending by financial institutions. Ultimately, the goal is for direct public funding to constitute only 30-40% of infrastructural investment, with the majority sourced from private investors and commercially operated state-owned enterprises ([PERSON] and [PERSON], 2024). Therefore, private sector equity is instrumental to the funding of public infrastructure projects under PGII, GG, FOIP/PQI and 3 SI. Public financing infused with private financing through shared partnership may be considered advantageous over purely public financing because private providers have stronger incentives to ensure quality by taking responsibility for both the construction and maintenance of infrastructure projects, sharing risks, and improving efficiency and innovation ([PERSON] et al., 2020). This model contrasts with the BRI, which is more reliant on public financing and may not have the same level of quality incentives. Empirical evidence indicates that in Asia, highly indebted countries exhibit a positive and significant medium-term private investment multiplier. This outcome is supported by several region-specific factors that bolster investor confidence: the adoption of counter-cyclical fiscal policies to sustain macroeconomic stability, the continued prioritisation of infrastructure investments, export-oriented development strategies with integration into global value chains, and access to regional financial safety nets. Additionally, structural reforms and liberalisation efforts, economic diversification across emerging sectors, and growing emphasis on high-tech industries create a conducive environment for enhancing returns on private capital, even under conditions of elevated public debt ([PERSON] et al., 2024). Ideally, the relationships between participating countries and the leading states of global or regional infrastructure initiatives should not be zero-sum. Engagement with one initiative should not preclude mutually beneficial cooperation with others, nor should it result in disproportionate dependency or trade asymmetries ([PERSON], 2021). However, under the BRI's '17 + 1' mechanism in Central and Eastern Europe, concerns have emerged over worsening trade imbalances and declining foreign currency reserves. For instance, the EU's trade deficit with China peaked at EUR 397 billion in 2022 before decreasing to EUR 291 billion in 2023 marking the first significant reduction in a decade. This reflects China's shift towards domestic consumption and reduced foreign imports under its \"dual circulation\" model. In response to these structural asymmetries, initiatives like 3 SI aim to diversify investment sources and reduce dependence on Chinese financing ([PERSON] and [PERSON], 2023). A notable example of dissatisfaction with BRI outcomes is Italy's withdrawal from the BRI in 2023, driven by persistent trade imbalances--Italy's exports to China lagged significantly behind its imports, especially relative to non-BRI European economies ([PERSON], 2025).