World Bank and Global Environment Facility to Support Protection of Costa Rica's Forests

Contact Person:
Contact (World Bank): Christopher Neal (202) 473-7229
cneal1@worldbank.org
Contact (Global Environment Facility): Hutton Archer (202) 458-7117
harcher@worldbank.org

WASHINGTON, June 6, 2000 -- The World Bank today approved a US$33.9 million loan to support a US$8 million grant by the Global Environment Facility (GEF) to Costa Rica's National Forestry Financing Fund (Fondo Nacional de Financiamiento Forestal, or FONAFIFO). This funding will provide financial incentives to small and medium-sized landowners to conserve primary forests, encourage sustainable management of secondary forests, and promote reforestation efforts throughout Costa Rica.

"The Ecomarkets project is a partnership in which the Costa Rican Government, the World Bank and the Global Environment Facility will work together to encourage private sector support for protecting forests," said David de Ferranti, the World Bank's Vice President for Latin America and the Caribbean.

The project aims to encourage private owners of small and medium-sized parcels of ecologically valuable land to adopt or improve sustainable forest management practices. It seeks to protect up to 100,000 hectares of forests across Costa Rica over the next five years.

Specifically, the Ecomarkets project will finance efforts to conserve biodiversity in areas surrounding national parks and biological reserves, as well as sustain and improve the quality of water and irrigation services. This nationwide conservation initiative will also sustain Costa Rica's contribution to carbon sequestration levels, that is, the amount of carbon dioxide absorbed by the country's forests. In return for financial assistance for conservation efforts, landowners will also implement forest fire prevention plans and halt illegal hunting and logging.

The Global Environment Facility's $8-million grant will assist the Government of Costa Rica in fostering biodiversity conservation and preserving important forest ecosystems surrounding national parks and biological reserves of the Mesoamerican Biological Corridor.

The US $33.9 million loan is a variable-spread and denominated in multiple currencies loan, with a maturity of 17 years, including a four-year grace period.