Costa Rica agrees to US$710 million in IMF financing to combat climate change

The International Monetary Fund (IMF) technical mission today agreed with the government of Costa Rica on US$710 million in financing to help meet its agenda for transitioning to a carbon-neutral economy and addressing climate change.

The agreement follows the third review by the IMF’s technical mission related to the US$1.77 billion Extended Fund Facility (EFF), which the Costa Rican government will use to reduce interest payments on its debt.

This third review will allow Costa Rica to receive a new disbursement of US$264 million once IMF authorities ratify the agreement.

The money to combat climate change comes from a new IMF facility, Resilience, and Sustainability, to which few countries have access.

“We are starting with countries with a strong climate agenda and need these funds now,” said IMF mission chief Manuela Goretti.

Goretti explained that these funds will be granted for a 20-year term, with a 10-year grace period and “a very low-interest rate.”

Costa Rica aims to become an economy that offsets and reduces its total carbon emissions by 2050.