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Costa Rica has been selected as the new physical location of the Luxembourg Development Cooperation in Central America, in particular because of its institutional stability and its status as a regional hub, which ensure multi-country coverage, while capitalising on existing bilateral/regional relations and the presence of an international network.

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In view of the close political and strategic alignment in development cooperation between Luxembourg and Costa Rica, the Luxembourg Development Cooperation has decided to complement its regional efforts with bilateral activities. These activities will be within the priority areas of the regional strategy mentioned above.

A letter of understanding formalising the intention of the two countries to engage in bilateral cooperation on these themes was signed by Minister Fayot in January 2023 during a visit to the country. Negotiations are underway for a general cooperation agreement between Costa Rica and Luxembourg that creates the necessary legal framework for the implementation of bilateral projects and programmes and allows LuxDev to establish itself locally.

Through the Nicaraguan Civil Society Support Fund (FASOC), managed by Oxfam IBIS (EUR 1.8 million, 2019-2023), the Luxembourg Development Cooperation supports Costa Rican organisations working with Nicaraguan migrants and refugees. This approach has been changed, following the ban by the Nicaraguan authorities on Oxfam IBIS operating in the country. Currently, projects by three NGOs (Movimiento campesino, CENDEROS and SOS Nicaragua) support: (i) the basic needs of Nicaraguan farm workers in Costa Rica, (ii) the improvement of the quality of life of the Nicaraguan refugee population that has settled in the northern part of Costa Rica, and (iii) the sexual and reproductive health of displaced Nicaraguan women.