CAF approves USD 300 million to improve forest management in Panama

CAF, Development Bank of Latin America and the Caribbean, approved a USD 300 million loan for Panama to improve forest management and support the continuity of policies that promote sustainable forest management, ecosystem conservation and green financing.

The approved resources recognize Panama's efforts in forest policy, aligned with the National Forestry Strategy 2050 and the National Forest Restoration Program 2021-2025. They also seek to strengthen forest governance and institutional capacity to improve oversight, regulation and monitoring of the sector. The financing will also foster innovative mechanisms for accessing resources for forest sustainability initiatives and promote the integration of the sector into the national economy in a sustainable manner.

"This financing reflects our commitment to Panama and its leadership in the conservation of its forests, which are fundamental for biodiversity and the fight against climate change. With this operation, CAF reaffirms its support for policies that balance economic development with environmental protection, promoting sustainable and inclusive forest management," said Sergio Díaz-Granados, CAF's executive president.

Panama's forestry sector plays a key role in biodiversity conservation, climate regulation and the sustainable use of its resources. Its forests are home to a wide variety of species and contribute to mitigating climate change by acting as carbon sinks, regulating rainfall and preventing natural disasters such as floods and landslides. Proper management of these resources enables responsible timber production, boosts reforestation and promotes ecotourism and the bioeconomy, ensuring a balance between economic development and environmental protection.

Between 2020 and 2024, CAF approved operations for Panama for USD 2.812 billion and disbursed USD 2.058 billion. In the last five years (2020-2024), approvals represent an average of USD 562 million annually, equivalent to 4.2% of the total approved by CAF in that period, with average disbursements of USD 413 million.