COOPERATION WITH THE PRIVATE SECTOR

Since the 2015 Addis Ababa Action Agenda on Financing for Development, it has been widely recognised that mobilising the private sector is essential in order to help implement the sustainable development goals (SDGs) globally. It is with this in mind that the formation of a closer relationship between Luxembourg Development Cooperation and private sector stakeholders continues to be encouraged, with the specific aim of identifying innovative solutions and making them available to help achieve development objectives in developing countries. All the initiatives in this framework place a central focus on the responsible conduct of businesses in relation to human rights and compliance with environmental criteria and the principle of untied aid.

In 2024, the Directorate for Development Cooperation and Humanitarian Affairs continued the deployment of the LuxAid Challenge Fund and the LuxAid Demonstration Fund. The first instrument, the LuxAid Challenge Fund, targets innovative and high-impact young companies offering solutions to a specific development challenge identified in one of the Luxembourg Development Cooperation partner countries. The second instrument, the LuxAid Demonstration Fund, is aimed at more mature companies and focuses on scaling up an innovative solution that has been tested on a smaller scale and whose impact has been proven. These two instruments were launched in Senegal, Kosovo and Rwanda in 2024. In addition, two editions of the Business Partnership Facility selected a total of five projects in Kosovo, Cabo Verde, Tanzania and Burkina Faso, including two projects led by Luxembourg companies.

It should be noted that business due diligence plays a central role in the implementation of these instruments; the outcomes of the interventions and the award of funds to businesses are conditional on specific commitments relating to respect for human rights and environmental criteria. In general, the Directorate for Development Cooperation and Humanitarian Affairs has continued to follow the work of the Enterprises and Human Rights working group, which is responsible for implementing and monitoring the second national action plan on business and human rights (2nd NAP).