CAF approves USD 500 million green credit line for Costa Rica

The innovative financial instrument will enable the country to respond to market crises and climate disasters, and marks a milestone as the first green liquidity line approved by CAF.

June 29, 2025

The Board of Directors of CAF, Development Bank of Latin America and the Caribbean, approved a Contingent, Revolving and Uncommitted Credit Line in favor of the Republic of Costa Rica for up to US$500 million. This operation is the first green liquidity line approved by the institution and the first operation of its kind for Costa Rica as a member country.

"This financing marks a fundamental precedent in our commitment to sustainability and economic resilience in the region," said Sergio Diaz-Granados, CAF's executive president. "Costa Rica is a leader in environmental management and now has a cutting-edge financial tool that will allow it to respond immediately and effectively to both market crises and climate emergencies."

The line of credit is designed with two different components according to its purpose: operations of up to seven years to support the country's public debt management strategy when conditions for accessing international capital markets are not convenient for the country, as well as financing of up to 20 years to address emergencies or disasters caused by extreme weather events.

This financial mechanism not only strengthens the country's immediate response capacity, but also sends positive signals to the market that help mitigate volatility and maintain confidence in the Costa Rican economy. The country's prudent fiscal management has been recognized with improvements in its credit rating and a reduction in country risk, bringing it closer to investment grade.

With this initiative, CAF reaffirms its commitment to the sustainable development of Latin America and the Caribbean, offering innovative financial solutions that enable the countries of the region to face the challenges of the 21st century with greater resilience and adaptability.

 

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