WASHINGTON/PARIS & LUXEMBOURG CITY, August 28, 2022 – Seventy-five years ago today, the International Bank for Reconstruction and Development (IBRD), now known as the World Bank, made its first and only loan in Luxembourg. The loan was IBRD’s fourth loan, laying the foundation for Luxembourg’s steel industry and playing a key role in supporting the country’s economic recovery in the aftermath of World War II.
The loan, officially dated August 28, 1947, was for 12 million dollars, or about 155 million dollars (152 million euros) today, to support the Luxembourg steelworks’ rail project. The money financed rolling stock for the railroads and equipment for the steel industry: US$4.5 million was used to purchase locomotives, covered and gondola freight cars, baggage cars and miscellaneous railway equipment; and US$7.5 million for the purchase of a modern reversible steel strip rolling mill, which has enabled the country to produce high quality finished products using modern methods. This laid the foundations for Luxembourg’s steel industry, which helped the country to experience a new boom.
Funds provided by the World Bank were only a small fraction of the external financing needed for recovery, but they helped to keep Luxembourg afloat until the Marshall Plan became operational in 1948. In 1974, Luxembourg repaid his loan and never returned as an IBRD borrower. . Today, Luxembourg is a key development partner of the World Bank, supporting development priorities shared with the institution’s 188 other member countries, including climate, debt, poverty reduction, health, education and private sector development.
As a donor, Luxembourg is one of the few countries to allocate 1% of its gross national income to official development assistance. Working with the World Bank generates results that improve lives in low- and middle-income countries around the world.
Luxembourg’s World Bank Governor, Minister of Finance, Yuriko Backes, comments: “Over the past 75 years, Luxembourg has evolved from a recipient country to a donor country that makes great efforts to support the Bank’s objectives. world. Thanks to the economic boom, Luxembourg, a founding member of the European Union, while remaining a major steel-producing country, has diversified its economy and now hosts one of the world’s main financial centers, strongly focused on bonds. green, social and sustainable. and the second largest fund center in the world after the United States.
World Bank Group President David Malpass said: “Amid the multiple crises facing Europe and the world, today’s anniversary of the World Bank’s first and only loan to Luxembourg in 1947 for reconstruction and steel production reminds us how countries can recover from conflict. We have benefited from a strong partnership with the Luxembourg government, and I am grateful for their continued support of IDA, our fund for the poorest.