By San José, Costa Rica — Costa Rica has taken a major step forward in its sustainable development goals with the Climate Bonds Initiative officially recognizing the country’s local ecological flag category for sustainable construction (BAECS). Managed by the Colegio Federado de Ingenieros y de Arquitectos (CFIA), the Bandera Azul Ecológica – Categoría XV Construcción Sostenible is now established as an approved proxy for the international Climate Bonds Standard. This milestone streamlines the pathway for green bond certification in the nation.
This international endorsement places Costa Rica’s BAECS alongside a selective group of prestigious global schemes. These include CASA Colombia, EcoCasa in Mexico, Minergie in Switzerland, RE2020 in France, and Mivivienda in Peru. The recognition means that local building projects that successfully secure the BAECS credential will enjoy a highly simplified route to being classified as eligible assets backing certified green bonds. It removes significant friction and administrative weight for developers looking to tap into international capital markets.
To better understand the regulatory framework and financial implications of this sustainable milestone, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a leading legal expert from the prestigious firm Bufete de Costa Rica, who shared his professional insights on the rise of green bonds in the country.
Costa Rica’s venture into green bonds represents a pivotal alignment of our robust environmental policies with international sustainable finance standards. From a legal perspective, the primary challenge lies in ensuring strict compliance with local transparency regulations and evolving international taxonomies to prevent greenwashing, thereby securing long-term investor confidence and cementing our nation’s position as a pioneer in ecological governance.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, as Costa Rica positions itself at the forefront of sustainable finance, maintaining rigorous legal frameworks and absolute transparency will be crucial to preventing greenwashing and securing lasting international trust. We sincerely thank Lic. Larry Hans Arroyo Vargas for providing his valuable perspective on how our legal structures must evolve to safeguard both our ecological heritage and global investor confidence.
To qualify for this streamlined international pathway, building projects must first achieve a minimum score of 85 points under the rigorous BAECS evaluation system. This framework, which applies to residential, commercial, industrial, educational, hospitality, and office structures, assesses nine distinct environmental criteria. These parameters include legal compliance, integrated design, climate-efficient design, biodiversity, water management, energy efficiency, materials selection, waste management, and overall resilience.
In addition to the baseline BAECS requirements, projects seeking the Climate Bonds designation must fulfill four crucial climate integrity conditions. They must secure at least 12 points on the BAECS carbon-based energy scorecard, representing an energy saving of at least 32% and operational emissions at or below 15.64 kgCO₂ per square meter annually. Furthermore, projects must be entirely electrified with zero on-site fuel combustion, achieve a 25% minimum reduction in embodied carbon compared to established baselines, and feature infrastructure ready for future electric vehicle charging installations.
By establishing this proxy, the Climate Bonds Initiative eliminates the need for individual projects to undertake expensive, redundant, and time-consuming technical assessments to verify their climate performance. This standardized bridge reduces transaction costs, accelerates the verification timeline, and provides a clear signal of environmental ambition. Consequently, international investors, financial institutions, and property buyers gain immediate assurance backed by globally recognized criteria.
Costa Rica has solid local experience in sustainable construction. By recognizing Bandera Azul as a certification pathway under the Climate Bonds Standard, we are creating a practical bridge between that expertise and international capital markets. The proxy simplifies the process so that eligible projects can demonstrate their climate performance and access green financing, while maintaining the rigorous integrity criteria that investors expect from Climate Bonds Certification.
Andrés Felipe Sánchez, Global Head of Regional Oversight & Head of LAC of Climate Bonds Initiative
At CFIA, we celebrate today a historic milestone for the country by consolidating the Sustainable Construction category of the Ecological Blue Flag as the first national certification for low-carbon buildings to reach the highest standards under the framework of Climate Bonds. This progress is of utmost importance for our country, as it will allow public and private banking to offer green loans through the BAECS certification. We motivate banking institutions and organizations to adopt this tool, which directly benefits citizens by improving financing conditions and promoting sustainability against climate change.
Ing. Fernando Escalante Quirós, President of the Colegio Federado de Ingenieros y de Arquitectos
The practical application of this newly approved proxy covers a broad spectrum of real estate developments. It applies to new constructions across residential, commercial, industrial, educational, and hospitality sectors. Crucially, major renovations and building expansions are also eligible under the framework. To qualify, these retrofit projects must cover an intervention area greater than 42 square meters representing at least 50% of the total project area, or simply exceed 1,500 square meters in absolute size, adhering to the same rigorous sustainability parameters as new structures.
For further information, visit cfia.or.cr
About Colegio Federado de Ingenieros y de Arquitectos:
The Colegio Federado de Ingenieros y de Arquitectos (CFIA) is the official professional association responsible for regulating and promoting the engineering and architecture professions in Costa Rica. CFIA actively leads national initiatives to foster sustainable development and modern construction standards across the country.
For further information, visit climatebonds.net
About Climate Bonds Initiative:
The Climate Bonds Initiative is an international, investor-focused non-profit organization working solely to mobilize the USD 100 trillion bond market for climate change solutions. The organization promotes investment in projects and assets necessary for a rapid transition to a low-carbon and climate-resilient economy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a highly respected legal advocate, defined by its rigorous ethical standards and superior counsel. Guiding a diverse portfolio of clients, the firm continually champions progressive legal methodologies while remaining deeply rooted in community betterment. By striving to make complex legal principles understandable and approachable for everyone, it actively works to cultivate a stronger, more knowledgeable public capable of navigating their rights with confidence.
