The United States government pardoned $21.2 million in debt owed by Costa Rica last week in a deal that will eventually generate $27 million for forest conservation projects over the next 14 years.
Under the agreement, known as a debt-for-nature swap, Costa Rica’s Central Bank is obligated to invest in forest conservation projects through 2024 in exchange for the reduction of the debt, which was owed to pay outstanding loans to Costa Rica from the United States Agency for International Development. The Nature Conservancy, a private international conservation organization, will donate $3.9 million as part of the deal.
The money from the Central Bank and other donors will be directed to a trust fund – the Tropical Forest Fund – managed by Costa Rica Por Siempre, a public-private Costa Rica-based nonprofit association. According to the accord, the funds will be used in part to establish management plans and elaborate conservation strategies to protect flora and fauna in Costa Rica’s many national parks and wildlife refuges.
Other funds will finance research in the areas, such as studies to determine the ability of ecosystems within the reserves to adapt to climate change, said Costa Rican Environment Minister Teófilo de la Torre.
The Osa Peninsula and La Amistad National Park, both in the country’s southern zone, are among the areas that will receive attention under the new agreement. In Osa, efforts will be focused on conserving the extensive mangrove forests at the mouth the Térraba and Sierpe rivers and, farther north, near the mouths of the Naranjo and Savegre rivers.
Natural habitats in the country’s northern zone, as well as in the volcanic mountain ranges in central and northwestern Costa Rica, also are slated to benefit from the debt-forgiveness capital.
“As you see, the money will help finance conservation activities in almost all parts of Costa Rica,” said de la Torre. “These activities will contribute to some of the most important efforts that the country is undertaking in conservation matters.”
Last week’s accord represents the second in a series of debt-for-natures exchanges between Costa Rica and The United States. Another, in 2007, slashed $26 million dollars off of Costa Rica’s tab.
The two debt write-offs fall under the framework of The United States’ Tropical Forest Conservation Act, which was passed in 1998. The legislation authorizes the U.S. to reduce the debt owed to it by foreign countries in exchange for tropical forest conservation.
The law “requires the use of funds to provide grants to conserve, maintain, and restore tropical forests in beneficiary countries” and mandates that grants be made to “non-governmental environmental, forestry, conservation and indigenous peoples organizations in beneficiary countries.”
The act authorizes grants of more than $100,000 to a recipient country. Since the act was signed, the U.S. has awarded more than $135 million in debt-relief to 11 countries, including Panama and El Salvador.
Costa Rica, having received more than $50 million of the total, is the single greatest benefactor of the Tropical Forest Conservation Act.
After last week’s swap, Costa Rica’s debt with the U.S. stands at $77 million, according to The Associated Press.
“This agreement reaffirms the longstanding commitment that the U.S. has had to Costa Rica to promote sustainable development,” said U.S. Ambassador to Costa Rica, Anne S. Andrews. “We are pleased…that Costa Rica can show it is possible to promote economic growth at the same time it guarantees its enormous natural patrimony.”
Outside of the Tropical Forest Conservation Act, The United States has a long history of donations to Costa Rican environmental causes.
In 1990, the U.S. donated $80 million to Costa Rica to found Earth University, a higher-education center that promotes sustainable and green development.
The U.S. also contributed to the establishment in 1996 of the Costa Rica-U.S.A. Foundation for Cooperation (CR-USA), a fund that promotes sustainable development, and which has funded conservation initiatives and environmental research and education initiatives throughout the country.
The Central Bank will make its first payment to the Costa Rica Por Siempre trust fund on Nov. 15 and continue to make deposits every year in February, August and November until May 15, 2024.