Luxembourg

Luxembourg is one of the most generous DAC members in terms of its gross national income (GNI) to official development assistance (ODA). Its development programme focuses on health, education and integrated local development, mainly in least developed countries (LDCs). Most of Luxembourg’s portfolio is implemented bilaterally. The Ministry of Foreign and European Affairs is responsible for designing and implementing Luxembourg’s development co-operation policy while the development co-operation agency, LuxDev, executes bilateral ODA on behalf of the state.

The latest OECD-DAC peer review of Luxembourg was conducted in 2017 and the next OECD-DAC mid-term review is planned for end 2020. Learn more about the 2017 OECD-DAC peer review of Luxembourg.

Luxembourg’s development co-operation strategy, The Road to 2030, prioritises four themes: 1) access to quality basic social services; 2) socio-economic integration of women and youth; 3) inclusive and sustainable growth; and 4) inclusive governance. The strategy also aims to leverage Luxembourg’s comparative advantage as a leading international financial centre and in the information and communication technology sector. The development co-operation programme is focused on seven partner countries, five of which are in sub-Saharan Africa.

Luxembourg provided more ODA in 2019 than in the previous year, with an increase of 2.7% in real terms from 2018. Total ODA on a grant-equivalent basis stood at USD 474 million (preliminary data), representing 1.05% of Luxembourg’s GNI in 2019.1 Luxembourg ranked first among DAC member countries in relation to its ODA/GNI ratio in 2019 – well over the 0.7% United Nations (UN) target, which it has exceeded every year since 2000. Its ODA budget does not include the cost of hosting refugees within its own borders or funding to combat climate change. The government has committed to achieve a 1% ODA/GNI ratio and Luxembourg is committed, at the European level, to collectively achieve a 0.7% ODA/GNI ratio by 2030. Total ODA on a grant-equivalent basis has the same value as net ODA under the cash-flow methodology used in the past, as Luxembourg provides only grants. With 0.46% of ODA to GNI committed to the LDCs, Luxembourg surpasses also the 0.2% UN target.2 See the methodological notes for details on the definitions and statistical methodologies applied.

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In 2018, Luxembourg provided most of its ODA bilaterally. Gross bilateral ODA was 73% of total ODA, of which 26% was channelled through multilateral organisations (earmarked contributions). Luxembourg allocated 27% of total ODA as core contributions to multilateral organisations, including European Union (EU) institutions.

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In 2018, Luxembourg increased its total support (core and earmarked contributions) to multilateral organisations. It provided USD 222 million of gross ODA to the multilateral system, an increase of 8.2% in real terms from 2017. Of this, USD 130 million was core multilateral ODA and the rest was earmarked for a specific country, region, theme or purpose. Project aid earmarked for a specific project or purpose (tight earmarking) accounted for 25% of Luxembourg’s non-core contributions, while the remaining 75% was softly earmarked (to pooled funds and specific-purpose programmes and funds).

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In 2018, Luxembourg’s total contribution to multilateral organisations was mainly allocated to the United Nations (UN), EU institutions and the World Bank Group. These contributions together accounted for 86% of Luxembourg’s total support to the multilateral system. The UN system received 54%, mainly through earmarked contributions. Out of a total gross volume of USD 120 million to the UN system, the top three UN recipients of Luxembourg’s support (core and earmarked contributions) were: the United Nations Development Programme (USD 19 million), the United Nations Population Fund (USD 16 million) and the United Nations High Commissioner for Refugees (USD 13 million).

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Note: See the list of UN acronyms.

See the section on “Geographic and thematic focus of ODA” for the geographical and thematic breakdown of bilateral allocations earmarked through the multilateral development system. Learn more about multilateral development finance.

In 2018, Luxembourg’s bilateral spending increased compared to the previous year. It provided USD 352 million of gross bilateral ODA (including earmarked contributions to multilateral organisations), which represented an increase of 6.6% in real terms from 2017.

In 2018, country programmable aid was 63% of Luxembourg’s gross bilateral ODA, compared to a DAC country average of 49%. Luxembourg does not report in-donor refugee costs as ODA.

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Note: NGO: non-governmental organisation.

In 2018, Luxembourg channelled its bilateral ODA mainly through the public sector and non-governmental organisations, as earmarked funding.

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Note: NGO: non-governmental organisation; PPP: public-private partnership.

In 2018, civil society organisations (CSOs) received USD 97 million of gross bilateral ODA. Five per cent was allocated to CSOs as core contributions and 22% was channelled through CSOs to implement projects initiated by Luxembourg (earmarked funding). Between 2017 and 2018, core and earmarked contributions to CSOs decreased as a share of bilateral ODA, from 28% to 27%. Learn more about ODA allocations to and through CSOs and civil society engagement in development co-operation.

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In 2018, Luxembourg’s bilateral ODA was primarily focused on Africa and Asia. USD 157 million was allocated to Africa – mainly South of Sahara – and USD 76 million to Asia, accounting respectively for 45% and 22% of gross bilateral ODA. USD 12 million was allocated to ODA-eligible countries in Europe. Africa was also the main regional recipient of Luxembourg’s earmarked contributions to multilateral organisations. Twenty-two per cent of gross bilateral ODA was unspecified by region in 2018.

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Bilateral ODA by recipient country

In 2018, 54% of gross bilateral ODA went to Luxembourg’s top 10 recipients. Luxembourg’s seven priority partner countries are its top recipients. The share of gross bilateral ODA that was not allocated by country was 27%, mainly due to core contributions to CSOs.

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In 2018, the LDCs received 50.5% of Luxembourg’s gross bilateral ODA (USD 177 million). This is well above the DAC country average of 23.8%, noting that 27% was unallocated by income group. Luxembourg allocated 4.8% of gross bilateral ODA to small island developing states in 2018, equal to USD 17 million.

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Note: LDC: least developed country; LIC: low-income country; LMIC: lower middle-income country; UMIC: upper middle-income country; MADCTs: more advanced developing countries and territories.

Support to fragile contexts reached USD 173 million of gross bilateral ODA in 2018 (49.2% of gross bilateral ODA). Extremely fragile contexts received 27.7% of this amount. Learn more about support to fragile contexts on the States of Fragility platform.

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Note: The chart represents only gross bilateral ODA that is allocated by country.

In 2018, most of Luxembourg’s bilateral ODA was allocated to social infrastructure and services. Investments in this area accounted for 44% of bilateral ODA commitments (USD 154 million), with a focus on education (USD 52 million), support to government and civil society (USD 29 million), and health (USD 28 million). Bilateral humanitarian aid amounted to USD 61 million (17% of bilateral ODA). Earmarked contributions to multilateral organisations focused primarily on humanitarian aid and social infrastructure and services in 2018.

In 2018, Luxembourg committed USD 1.5 million of ODA to the mobilisation of domestic resources in developing countries, amounting to 0.5% of bilateral allocable aid. Luxembourg committed USD 59.0 million (18.0% of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy in 2018.

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In 2018, Luxembourg committed 31% of its bilateral allocable aid to gender equality and women’s empowerment as either a principal or significant objective (up from 29% in 2017),3 compared with the DAC country average of 42%. This is equal to USD 102 million of bilateral ODA commitments in support of gender equality. Out of this, the share of bilateral allocable aid committed to gender equality and women’s empowerment as a principal objective was 4%, as the DAC country average of 4%. A significantly higher share of interventions on water and sanitation addresses gender equality than in other sectors. Luxembourg screens virtually all activities against the gender marker (100.0% in 2018). Learn more about ODA focused on gender equality and the DAC Network on Gender Equality.

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In 2018, Luxembourg committed 25% of its bilateral allocable aid (USD 80 million) in support of the environment as either a principal or significant objective, up from 21% in 2017 (the DAC country average was 33%). Two per cent focused on environmental issues as a principal objective, compared with the DAC country average of 11%. Eight per cent (USD 26 million) focused on climate change as either a principal or significant objective, down from 9% in 2017 (the DAC country average was 26%). Luxembourg has the same focus on mitigation (5% in 2018) as on adaptation (5%). Learn more about climate-related development finance.

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In 2018, Luxembourg’s Ministry of Foreign and European Affairs (MAEE) mobilised USD 2.4 million from the private sector through simple co-financing arrangements with the private sector in the context of its Business Partnership Facility.

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Note: CIV: collective investment vehicle.

Of the country-allocable finance mobilised from the private sector in 2017-18, 38% targeted middle-income countries and 62% the LDCs.

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Note: LDC: least developed country; LMIC: lower middle-income country.

Luxembourg’s private finance mobilised in 2017-18 related to activities in the business and other services (70%) and energy (30%) sectors. Learn more about the amounts mobilised from the private sector for development.

Luxembourg’s development co-operation is comprised of the Ministry of Foreign and European Affairs (MAEE), the executive agency Lux-Development (LuxDev) and the Ministry of Finance. The Directorate for Development Cooperation and Humanitarian Affairs at the MAEE is responsible for designing and implementing Luxembourg’s development co-operation policy while the development co-operation agency, LuxDev, executes around one-third of Luxembourg’s bilateral ODA on behalf of the state. The Ministry of Finance is responsible for multilateral initiatives with international financial institutions.

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The 2015 Evaluation Policy sets out the distribution of evaluation tasks between the MAEE and LuxDev. The ministry handles external independent evaluations while LuxDev delivers internal, independent evaluations. Both evaluation departments are institutionally separate from the operations teams. Learn more about evaluation in Luxembourg.

Multiannual evaluation plans are developed and co-ordinated by the Quality Control Division within the MAEE and are subject to approval by the minister.

Visit the DAC Evaluation Resource Centre website for evaluations of Luxembourg development co-operation.

Explore the Monitoring Dashboard of the Global Partnership for Effective Development Co-operation.

Government of the Grand Duchy of Luxembourg, Directorate for Development Cooperation and Humanitarian Affairs: https://cooperation.gouvernement.lu/en/cooperation-au-developpement.html

Luxembourg Development Agency (LuxDev): https://luxdev.lu/en/home

Member of the OECD Development Assistance Committee (DAC) since 1992.

The methodological notes provide further details on the definitions and statistical methodologies applied, including the grant-equivalent methodology, core and earmarked contributions to multilateral organisations, country programmable aid, channels of delivery, bilateral ODA unspecified/unallocated, bilateral allocable aid, the gender equality policy marker, and the environment markers.

← 1. DAC members adopted the grant-equivalent methodology starting from their reporting of 2018 data as a more accurate way to count the provider’s effort in development loans. See the methodological notes for further details.

← 2. All 2019 statistics in this paragraph are expressed in current prices and, therefore, they may differ from values in the ODA volume chart, which uses constant prices.

← 3. The use of the recommended minimum criteria for the marker by some members in recent years can result in lower levels of aid reported as being focused on gender equality.

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https://doi.org/10.1787/2dcf1367-en

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