World Bank Approves $300 Million Loan for Costa Rica's Fiscal and Green Growth Initiatives

World Bank Backs Costa Rica's Economic Reforms with $300 Million Loan

WASHINGTON, D.C. – The World Bank's Executive Board officially approved a US$300 million loan for Costa Rica on September 30, 2025. This significant financial backing is designed to support the Costa Rican government's ongoing efforts to enhance the efficiency of its fiscal management and to promote sustainable economic activities that are expected to generate new and better-quality jobs, especially within the nation's rural and coastal communities.

The operation, officially named the 'First Costa Rica Fiscal Management and Green Growth Development Policy Loan,' is a variable-rate loan with a final maturity of 33.5 years, including a six-year grace period.

Strengthening Fiscal Management and Public Finances

A core component of the loan focuses on improving Costa Rica's fiscal health. This includes several key areas:

• Tax Collection: Efforts will be made to optimize tax collection through better management of exemptions, aiming for a more equitable tax policy.
• Public Spending Efficiency: The implementation of Results-Based Budgeting will strengthen the efficiency of public expenditures.
• Debt Management: Initiatives will support the development of capital markets and ensure access to financing under more favorable conditions.

Rudolf Lücke Bolaños, Costa Rica's Minister of Finance, stated, 'The support from the World Bank allows us to accelerate the modernization of our fiscal and environmental policies to consolidate Costa Rica as a regional benchmark in sustainability and financial responsibility. This joint effort will translate into better services for citizens, especially in key areas such as health, education, and environmental protection.'

Promoting a Green and Job-Generating Economy

Beyond fiscal reforms, the loan is strategically directed towards fostering a green economy and creating sustainable livelihoods. Key initiatives in this area include:

• Environmental Services: Expansion of the Payment for Environmental Services program to encompass biodiversity, water, and marine ecosystems.
• Sustainable Agriculture: Establishment of a national livestock traceability system to support growth in green sectors like sustainable agriculture and ecotourism.
• Inclusive Job Creation: The program aims to link conservation with income generation, offering a scalable model for job creation and community strengthening, with a particular focus on ensuring the participation of vulnerable groups, such as women and indigenous peoples, in environmental conservation programs.

Carine Clert, World Bank Country Manager for Costa Rica and El Salvador, emphasized the collaborative nature of the initiative, stating, 'This new loan reflects the strong collaborative relationship between the World Bank and the Government of Costa Rica, based on trust and a shared commitment to economic growth and environmental protection. As the country moves toward a climate-resilient economy, these initiatives help create sustainable livelihoods and improve job stability.'

Long-Term Impact and Sustainability

This loan is the first in a programmatic series of two operations, building on previous efforts to promote fiscal stability, green growth, and climate resilience. It underscores the World Bank's commitment to Costa Rica's long-term development, aiming to ensure the continuity and sustainability of the country's achievements in fiscal stability and its transition to a green and climate-resilient economy.