Luxembourg’s Drought Resilience Investment Facility: Unlocking private sector action 

On 17 September, in Luxembourg, Xavier Bettel, Deputy Prime Minister and Minister for Foreign and European Affairs, Cooperation and Humanitarian Action, Gilles Roth, Minister of Finance, and Yasmine Fouad, Executive Secretary of the United Nations Convention to Combat Desertification (UNCCD), signed an agreement establishing the Drought Resilience Investment Facility (DRIF). 

As the first fund created under the Luxembourg Earth Impact Fund (LEIF), the new Drought Resilience Investment Facility marks a major step in sustainable finance. With a target of USD 400 million, it will back sustainable farming, improve water access and promote nature-based solutions. Luxembourg has pledged EUR 2 million as seed funding, reaffirming its commitment to global cooperation and green investment. 

A global crisis that cannot be ignored 

Up to 40 per cent of the world’s land is already degraded, threatening food, water, and livelihoods for nearly half of humanity. This degradation is compounded by drought—a silent but escalating disaster that already costs the global economy more than USD 307 billion each year, fueling hunger, forced migration and widening inequalities. 

Since 1994, the UNCCD has been the only legally binding international treaty focused on sustainable land management. Luxembourg ratified the Convention in 1997 and, with the launch of DRIF, is reaffirming its leadership in the global response to land degradation and drought. 

Building on global momentum 

COP16 in Riyadh marked a major turning point for drought resilience — over USD 12 billion was pledged through the Riyadh Global Drought Resilience Partnership to support vulnerable countries. Yet, the private sector continues to account for only 6% of global financing in this space. DRIF is designed to bridge that gap by offering structured impact investment pathways. Backed by proven data — every dollar invested in nature-based drought solutions can return up to USD 27 — the Facility aims to unlock scalable, profitable, and sustainable investment for drought-prone communities. 

“The creation of this fund is not only a financial innovation – it is a lifeline for communities on the frontlines of drought,” said UNCCD Executive Secretary Yasmine Fouad. “It shows what is possible when governments, the UN system and the private sector come together behind a common vision: a more resilient future for people and the planet.”  

 Luxembourg’s leadership in sustainable finance 

Luxembourg’s support for the DRIF strengthens its role as a pioneer in sustainable and impact finance. With this initiative, Luxembourg helps open a new chapter in international cooperation on drought resilience – one where public leadership and private investment join forces to protect livelihoods, restore land and secure water for future generations.