Luxembourg is pushing to host the headquarters of the planned Defence, Security and Resilience Bank (DSRB), a commercial lending institution designed to finance NATO defence projects and Ukraine’s military modernisation. The bid comes after six NATO member states and Ukraine announced in early July their intention to create the new bank.
The founding group comprises Albania, Belgium, Canada, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine. The DSRB’s statutory mission is to raise capital and extend loans to NATO members and Ukraine for arms purchases, dual-use investments and armed forces modernisation.
At this stage, the bank’s capital structure, the mandate of individual states in its governing bodies and the range of available financial instruments have not yet been finalised. Work is ongoing, and in the meantime Luxembourg’s government has proposed that the new institution be headquartered in its capital.
Complementarity with existing institutions
– The creation of a European bank in Luxembourg is in line with the logic of complementarity based on the existing financial ecosystem and existing European and allied institutions – said Luxembourg Defence Minister Yuriko Backes, as quoted by the portal L’essentiel Luxembourg.
– The goal is to create synergy with the European Investment Bank (EIB) and the NATO Support and Procurement Agency, as well as the 'Space Campus’ and 'Defence Campus’ projects – Backes added.
The reference to the EIB is significant: that institution already funds dual-use projects, but the DSRB is envisioned as a dedicated vehicle focused solely on defence and security, with a commercial mandate and the ability to attract private capital.
Private capital and strategic control
Under the plans, private financial investors will also be able to participate, playing a complementary role particularly through providing guarantees and sharing business risk. However, strategic decisions will remain with the bank’s management bodies and its public shareholders.
The initiators expect further NATO countries, including Poland, to declare their intention to join the project. The bank is designed to address a long-standing gap in alliance financing: until now, no dedicated multilateral lending institution has existed to support defence investment on a commercial basis, leaving many projects dependent on national budgets or ad-hoc arrangements.
If Luxembourg succeeds in hosting the DSRB, it would further cement the Grand Duchy’s role as a hub for European financial institutions, alongside the European Investment Bank and numerous other financial services entities.
Źródło: WNP.PL, Fot. Tefik rustemov / Shutterstock
