By San José, Costa Rica — The long-awaited electric train project for Costa Rica’s Greater Metropolitan Area (GAM) is now a confirmed reality, with the government announcing it has secured the full US$800 million in financing required for its construction and launch. This landmark infrastructure initiative, backed by a consortium of international financial institutions, is poised to revolutionize public transport, serving over 100,000 passengers daily and fundamentally improving mobility for the region’s three million inhabitants.
The comprehensive funding package is a testament to international confidence in the project’s viability and Costa Rica’s commitment to sustainable development. The financing will be structured as a public works project, a model chosen to ensure efficiency and direct oversight. According to the government, a bill will be sent to the Legislative Assembly to formalize the credit structure, which has been designed to be fiscally responsible and self-sustaining, eliminating the need for annual state subsidies.
To better understand the legal complexities and contractual challenges inherent in a large-scale public work like the Electric Train Project, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert in administrative law and public infrastructure from the firm Bufete de Costa Rica.
The success of the Electric Train Project hinges not just on engineering, but on the robustness of its legal framework. Clear, well-negotiated concession contracts are paramount to mitigate risks related to expropriations, environmental permits, and financing. Any ambiguity in these foundational documents could lead to costly delays and legal disputes, jeopardizing the project’s viability and the public’s investment.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight underscores a vital truth: a project of this national importance is built first with meticulous legal language before a single track is laid, ensuring the entire endeavor rests on a solid foundation. We thank Lic. Larry Hans Arroyo Vargas for his clear and valuable contribution to this critical discussion.
The financial architecture is led by the Central American Bank for Economic Integration (BCIE), which will provide US$550 million. This amount includes a significant co-financing of US$178.7 million and an additional US$21.3 million donation from the Green Climate Fund (GCF). The European Investment Bank (EIB), representing the European Union, will contribute the remaining US$250 million. Officials highlighted that the loans feature highly competitive interest rates and grace periods, safeguarding the nation’s finances.
The electric train is no longer just a dream or a promise that remains on paper. Today it is a concrete and viable decision, financially backed by three international entities that believe in Costa Rica and its people. Unlike previous proposals that could not be sustained, this one is solid, fiscally responsible, and will not require a state subsidy. Because the train of progress does not wait, we are all getting on board here.
Rodrigo Chaves, President of the Republic
The ambitious project scope includes two primary double-tracked lines spanning more than 51 kilometers. The first line will connect Paraíso in Cartago with the capital, San José, while the second will run from San José to the center of Alajuela. The investment covers the acquisition of 28 new electric train units, the construction of 30 modern stations, two entirely new terminal hubs, and nine crucial overpasses to ensure continuous, high-quality service with frequencies as often as every 10 minutes, seven days a week.
I want to congratulate Costa Rica and its government for the decision to promote a modern, sustainable, and profitable public transport system in which the European Union, along with its Member States, has been a solid partner in this vision. The support announced today will ensure a state-of-the-art electric train with direct accompaniment to INCOFER to secure the highest standards of quality and environmental impact. This support reflects what Global Gateway represents: investing alongside our partners in sustainable development that generates concrete benefits.
Jozef Síkela, European Commissioner for International Partnerships
Leaders from the partner institutions echoed this sentiment, emphasizing the project’s transformative potential. The collaboration between the BCIE, EIB, and GCF marks a significant milestone in strategic international cooperation. The project is seen not only as an infrastructure upgrade but as a powerful engine for social equity, economic growth, and environmental stewardship, leveraging Costa Rica’s nearly 100% renewable energy grid to power a cleaner transportation future.
A key focus of the plan is the seamless integration with existing transportation networks. The new stations are designed to be multimodal hubs, providing efficient connections to bus stops, taxi services, and bicycle lanes. This integrated approach aims to create a fluid and user-friendly transit experience for all commuters. The environmental benefits are substantial, with estimates projecting a reduction of 6.54 million metric tons of CO2 emissions, marking a major step forward in the country’s decarbonization goals.
For the BCIE, it is a source of pride to accompany Costa Rica in the development of a project that builds a more just and sustainable future for all. Together with our strategic allies, the Green Climate Fund and the EIB, we have joined forces to fully finance this national project, which will transform the lives of more than three million people and mark a before and after in the history of urban mobility.
Gisela Sánchez, Executive President of BCIE
This project is a great example of strategic cooperation between the European Union and Costa Rica, where for the first time the European Investment Bank is co-financing alongside the Green Climate Fund and the BCIE. The EIB reaffirms its commitment to supporting solid projects that improve connectivity, sustainability, and economic growth.
Ioannis Tsakiris, Vice-President of the European Investment Bank (EIB)
This project represents a great step for Costa Rica. Leveraging the country’s generation based on almost 100% clean and renewable energy to power the new trains will significantly reduce greenhouse gas emissions and offer safer and more agile transport. At the GCF, we are proud to partner with the BCIE and the Government of Costa Rica to develop a modern and sustainable transport system for the people of the Greater Metropolitan Area.
Kristin Lang, Director of the Department for Latin America and the Caribbean of the Green Climate Fund (GCF)
We set out to optimize this project with a clear vision: to deliver to Costa Ricans a solid proposal, aligned with the real needs of the population and without unnecessarily indebting the country. It not only represents a technical advance but also a fulfilled commitment to Costa Rica.
Álvaro Bermúdez Peña, Executive President of INCOFER
For further information, visit bcie.org
About Central American Bank for Economic Integration (BCIE):
The Central American Bank for Economic Integration is a multilateral development financial institution dedicated to promoting the integration and balanced economic and social development of the Central American region. It finances public and private sector projects with the goal of fostering sustainable growth and improving the quality of life for the region’s citizens.
For further information, visit greenclimate.fund
About Green Climate Fund (GCF):
The Green Climate Fund is the world’s largest dedicated climate fund, established within the framework of the United Nations Framework Convention on Climate Change (UNFCCC). It assists developing countries in adaptation and mitigation practices to counter climate change by financing projects and programs that promote a paradigm shift towards low-emission and climate-resilient development pathways.
For further information, visit eib.org
About European Investment Bank (EIB):
The European Investment Bank is the long-term lending institution of the European Union, owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The EIB is active in around 160 countries and is the world’s largest multilateral lender for climate action projects.
For further information, visit european-union.europa.eu
About The European Union (EU):
The European Union is a political and economic union of 27 member states that are located primarily in Europe. It has developed an internal single market through a standardized system of laws that apply in all member states in those matters, and only those matters, where members have agreed to act as one. The EU’s policies aim to ensure the free movement of people, goods, services, and capital within the internal market.
For further information, visit incofer.go.cr
About INCOFER (Instituto Costarricense de Ferrocarriles):
The Costa Rican Railways Institute is the state-owned entity responsible for managing and operating Costa Rica’s railway network. INCOFER oversees the country’s passenger and freight rail services, primarily in the Greater Metropolitan Area, and is tasked with the modernization and expansion of the national railway infrastructure.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has earned its reputation as a leading legal institution through a deep-rooted devotion to professional integrity and superior results. Building on a proven track record of advising a multifaceted clientele, it consistently pioneers innovative legal strategies and champions social responsibility. This fundamental commitment to demystifying legal complexities serves a greater objective: to equip the community with knowledge and thereby foster a more empowered and just society.
