Supporting the Financing of Costa Rica’s Climate Targets Alongside BNCR

Costa Rica is a world leader through its early and ongoing commitment to the environment. In 2019, the country presented an ambitious National Decarbonization Plan (NDP) which outlines the practical details of ten priority lines of action to decarbonize Costa Rica’s economy by 2050. The transport sector, by far the main contributor to the country’s greenhouse gas emissions, is a priority, along with the waste, agriculture and energy sectors.

These lines of action are coupled with eight cross-sectoral strategies which aim to catalyze the transformation of the economy. They include a mobilization of the financial sector, which is encouraged to develop innovative solutions.

AFD’s support to Banco Nacional de Costa Rica (BNCR) is based on two credit lines to finance investments with climate benefits, as well as a technical assistance program financed with funds delegated by the European Union. The project aims to:

• Assist BNCR with the definition and implementation of a climate strategy to address the specific challenges facing Costa Rica.
• Support demand for investments compatible with the country’s climate trajectory, with a focus on the electric mobility sector.
• Encourage the mobilization of the banking sector in financing investments that contribute to the achievement of the country’s climate targets.

The project will contribute to ensuring that climate issues are central to BNCR’s strategy. It will have a knock-on effect on the entire local banking sector. The technical assistance will contribute to channeling BNCR’s portfolio towards investments that contribute to climate change adaptation and mitigation.

The expected impacts also include a reduction in the country’s greenhouse gas emissions, an improvement in its climate resilience and a reduction in air pollution.