On July 15, 2024, IDB Invest, the private arm of the Inter-American Development Bank (IDB), and Banco Nacional de Costa Rica (BNCR) announced the launch of the first Costa Rica blue bond, a $50 million bond issuance.
Financial Structure of the Costa Rica Blue Bond
IDB Invest contributed $25 million to the bond, while also mobilizing an additional $20 million from FinDev Canada and $5 million from LAGreen.
The proceeds from the bond will help fund companies in Costa Rica that support projects related to the blue economy, such as: marine-coastal areas, sustainable water and sewage management, plastic waste management, and the circular economy.
What Are Blue Bonds?
Blue bonds are financing instruments that raise funds for investments that help preserve the ocean and use it sustainably to develop economies and improve livelihoods. Blue Bonds have a catalytic impact on financial markets for investors who want to contribute to better environmental outcomes, create sustainable ocean and water-related business opportunities, and signal responsible ocean stewardship.
IDB Invest also supported BNCR with advisory services, including blue investment analysis, developing a Sustainable Financing Framework with blue taxonomy, co-financing the second-party opinion, and conducting a training program to enhance sustainable finance capabilities, and will collaborate to identify further thematic investment categories, focusing on climate and social areas such as Afro-descendant communities, the silver economy, and indigenous peoples.
Case Study: Guanacaste Province
The development impact of the blue bond could be imagined on Guanacaste Province, a region known for its stunning coastlines and rich marine biodiversity. The project will include:
- Expansion of MPAs: Establishing new MPAs around Guanacaste to protect critical habitats and marine species.
- Eco-Friendly Infrastructure: Developing sustainable tourism infrastructure, including solar-powered accommodations and advanced waste management systems.
- Community Empowerment: Supporting local fishermen and tour operators in transitioning to sustainable practices, such as eco-tourism and sustainable fisheries.
- Research and Development: Funding research projects aimed at better understanding the unique ecosystems of Guanacaste and developing innovative conservation strategies.
The Guanacaste project exemplifies how the Blue Bond could create a synergy between conservation and economic development, ensuring the long-term preservation of this iconic ecosystem while benefiting local communities.
