Ukrainian President Volodymyr Zelenskyy’s visit to the Arab League summit on May 19 surprised observers around the world. In Jeddah, Zelenskyy fervently petitioned the Gulf countries to support Ukraine, the invaded, and not Russia, the invader. His visit was timely — so far neither Kyiv nor the West has been able to convince Arab nations to resolutely back Ukraine in the war. But whether the trip will be as impactful as Kyiv hopes only time will tell. And though more engagement from Gulf countries would only indirectly shorten the war, their political and economic support could significantly impact the wider Black Sea region — both in terms of post-war reconstruction in Ukraine as well as, more immediately, via strategic infrastructure investments targeting Ukraine’s non-Russian neighbors.

Russia’s full-scale invasion of Ukraine has destabilized and distressed the entire Black Sea neighborhood. Nevertheless, an in-depth look at this war-torn region shows that despite the war, or perhaps because of it, foreign direct investments into Black Sea littoral countries have endured or even grown; these opportunities, even in Ukraine, continue to be seen as lucrative. The broader region’s agricultural and industrial sectors and know-how continue to attract foreign investment. But notably, as the Black Sea countries develop, stabilize, and diversify away from Russia, critical infrastructure projects are seeing ever growing interest. In Romania, the European Union country that shares the longest border with Ukraine and which has been crucial in building “solidarity lanes” for transporting Ukrainian exports in 2022, foreign direct investment grew by 9% last year. Gulf countries are already present across the region, with significant investments in ports and agricultural products, but other investors, particularly from the EU, are also increasingly prioritizing Southeastern European and South Caucasus states when it comes to critical infrastructure investments. Is the Black Sea region becoming an area of strategic investment competition?

Broad interest in improving Black Sea connectivity

Building interconnectivity has become a top priority not only for the countries of the Black Sea region but for their neighbors as well. And Russia’s war seems to have fostered, rather than impeded, critical infrastructure investments there. At the beginning of this month, the EU approved a $49 million proposal for a cable running under the Black Sea, connecting Georgia with EU country Romania. The submarine internet cable is intended to diversify the communications sector in the South Caucasus away from Russia, whose companies control a large proportion of local internet cables linking Asia and Europe. Another trans-Black Sea project plans to stretch an electricity cable from Azerbaijan all the way to Hungary, via Georgia, the Black Sea floor, and Romania. The latter will carry power produced from renewable sources in Azerbaijan. Furthermore, new energy pipelines and liquefied natural gas (LNG) terminals across the region are planned or already being built. All are intended to help the Black Sea littoral countries diversify away from Russia and to develop the region’s interconnectivity in the energy, communications, and transit spheres. Many of these projects benefit from EU investments, but some are still in the incipient phase, exploring potential business opportunities. Long term, all of these countries will increase their focus on joining the green energy transition, where both the EU and Gulf countries have major stakes.

The Gulf states are leading investors in critical infrastructure around the world and have become prominent in markets spanning from Central Asia to Europe. In the Black Sea region itself, Gulf investors had traditionally focused on Turkey, but increasingly, Romania, Bulgaria, and Ukraine are also competing for Arab financing.

Romania: A leading partner

In Romania’s largest Black Sea port, Constanța, the Emirati logistics giant DP World was already operating a container terminal under a contract valid until 2049. The crucial importance of this transportation and cargo node became even more apparent following Russia’s re-invasion of Ukraine last year and its blockade of Ukrainian maritime exports. Unable to safely send loaded merchant vessels into open waters toward the Turkish Straits, Kyiv was forced to divert a significant portion of its exports — especially grain and foodstuffs — to Romania’s ports, which in turn face capacity limitations and are in need of rapid expansion. In June of last year, the Romanian government thus signed a memorandum of understanding with Abu Dhabi Ports Group for investment to enlarge the Constanța port, and the two sides are additionally eyeing the development of an airport logistics hub worth over $300 million.

Bucharest is keen to boost Emirati investment across multiple economic sectors. The United Arab Emirates is Romania’s largest trade partner among Gulf Cooperation Council (GCC) countries, with a significant growth rate — an 82% increase in bilateral trade from 2021 to 2022, reaching over $1 billion. The relationship has become so important that, in March of this year, the first visit of a Romanian president to the UAE took place. The two sides discussed further cooperation in transportation, logistics, food security, the green energy transition, and cyber security.

Of those, green energy transition projects, already under development for decades in Romania, are a particular focus at the moment, as illustrated by the recently established joint venture between Hidroelectrica, the Southeastern European country’s largest electricity producer, and the UAE’s state-controlled Masdar. The Emirati partner is becoming an important player in the green energy sector worldwide. And the Masdar-Hidroelectrica joint venture illustrates how joint green energy ventures can increasingly link the Gulf and Black Sea countries despite their geographic distance.

Bulgaria: Energy and transit hub aspirations

Bulgaria has also been vying for Gulf investments. Last year, Bulgarian President Rumen Radev offered for his country to become a gateway for Gulf states wanting access to the EU market and to help build robust European-Gulf relations. He opened a business forum in Abu Dhabi last September and lobbied for Emirati investments in the Bulgarian transportation, communication, and energy sectors, among others. Bulgaria also seeks to buy oil from the Gulf to diversify away from Russia. These initiatives complement and reinforce the country’s strategic goal of becoming a regional hub for both energy and logistics. Food sector investments in Bulgaria are another priority for Gulf investors, but hydrocarbon energy and green energy transition projects as well as critical infrastructure development are some of the fastest-growing areas of investment from all sources.

Ukraine: Greatest opportunities, but most serious challenges

Prior to the outbreak of full-scale hostilities in Ukraine, Qatari QTerminals signed a concession in 2020 worth $140 million, agreeing to invest in the development of the Mykolaiv port on the Black Sea. Though part of this port was hit by Russian bombardments last year, QTerminals has made it clear that it is not leaving the Ukrainian market; moreover, it has appealed to Turkey and the United Nations to pressure Russia not to abandon the Ukrainian grain export deal. Meanwhile, the company is looking at further critical infrastructure investments in Ukraine, particularly in the context of post-war reconstruction.

The Qataris are not alone in seeking opportunities in Ukraine. In 2021, the Ukrainian State Property Fund signed several memoranda of understanding with the UAE’s Mubadala Investment Fund to privatize a number of large Ukrainian companies, such as Interpipe, Dragon Capital, DTEK, Unit.City, OschadBank, UMG, Ufuture, and Epicenter. Most of these investments, together worth $3 billion, targeted agriculture and defense production. The hope, back then, was that Ukraine would become “a guarantor of food security in the Emirates.” Now, even with Russia’s partial naval blockade, Ukrainian food production remains crucial for the Gulf states and many other Middle Eastern countries. Notably, while Saudi Arabia and Ukraine recently agreed to deepen their energy sector cooperation, special focus in the bilateral relationship remains on preserving the grain deal.


Despite Russia’s ongoing aggression and its profound implications for Ukraine and other Black Sea countries, the region continues to develop. Critical infrastructure, logistics nodes, interconnectivity initiatives, and energy transition projects have all been areas of increased investment, including over the past year. Gulf countries, particularly the UAE, but also Qatar and Saudi Arabia, have become important players in all of the above-mentioned economic domains, and they are now competing with the EU for the most profitable or strategically important opportunities. As Black Sea countries seek to move away from Russian influence, their appetite for cooperation with the GCC countries has also grown. To what extent Gulf countries can take advantage of these new prospects will depend not only on offering profitable business terms but also on their ability to identify mutually beneficial projects that further unlock the Black Sea region’s potential as a crossroads between Europe, Eurasia, and the Middle East.


Dr. Iulia-Sabina Joja directs MEI's Black Sea Program and teaches European security as an adjunct professor at Georgetown University and George Washington University. Her research focuses primarily on European and Black Sea security. 

Photo by Saudi Foreign Ministry/Handout/Anadolu Agency via Getty Images

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