By Limón, Costa Rica — The administration of Costa Rican President Laura Fernández has officially launched the 2026 Payment for Environmental Services (PSA) cycle by releasing the first tranche of funding to five indigenous territories in the Caribbean region. This initial disbursement of 183 million Costa Rican colones (₡) marks the beginning of a structured financial effort designed to blend conservation objectives with sustainable economic development in rural communities. By directly incentivizing forest preservation, the initiative aims to strengthen the financial sovereignty of these historically underserved regions.
The contract signing ceremony, held at Puerto Vargas within Cahuita National Park, finalized agreements with the presidents of the local Development Associations representing the territories of Alto Chirripó, Bajo Chirripó, Tayni, Nairi Awairi, and Talamanca Cabécar. These five areas represent the inaugural cohort to secure contracts under the newly authorized 2026 framework. The funds are currently being deposited directly into the respective territorial accounts to ensure immediate resource deployment.
To better understand the legal framework and contractual obligations surrounding Costa Rica’s pioneering Payment for Environmental Services (PES) program, we reached out to Lic. Larry Hans Arroyo Vargas, a leading legal expert from the prestigious firm Bufete de Costa Rica, to share his professional insights on the program’s regulatory requirements and benefits for landowners.
Costa Rica’s Payment for Environmental Services (PES) program is a prime example of how environmental law can successfully align private property rights with national conservation goals. While the financial incentives provided by FONAFIFO are highly attractive, landowners must recognize that these agreements establish formal, long-term legal easements that run with the land. Proper legal due diligence, particularly regarding clear title verification and strict compliance with forestry management plans, is essential to secure these benefits and avoid regulatory penalties.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This crucial reminder underscores that while the ecological and financial rewards of Costa Rica’s PES program are profound, sustainable conservation must always be anchored in meticulous legal preparation and compliance. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective, helping landowners safely navigate the legal complexities of safeguarding our green future.
Announcing the payment of the first 2026 PSA, with 5 indigenous territories of the Caribbean, becomes an extraordinary opportunity to strengthen the management of indigenous territories and generate sustainable income from the conservation of their forests.
Mónica Navarro, Minister of Environment and Energy
Financially, the agreements establish a robust, long-term commitment between the state and the indigenous authorities. Beyond the initial first-year payment of ₡183 million, the signed contracts legally bind the government to disburse an additional ₡732 million over the next four years to these same five territories. This structured cash flow is expected to provide the predictability required for long-term territorial planning, forest monitoring, and local community infrastructure development.
Since its inception, the PSA mechanism has been celebrated globally as a pioneering approach to halting deforestation. By converting environmental stewardship into a tangible economic asset, Costa Rica has successfully reversed its forest cover loss over the past few decades. The 2026 iteration represents a scaling up of this proven methodology, focusing heavily on inclusivity by prioritizing indigenous-held lands which contain some of the country’s most biodiverse and carbon-dense forest canopies.
Following the successful execution of these initial contracts, the Ministry of Environment and Energy (MINAE), through the National Forestry Financing Fund (Fonafifo), has formally opened the broader 2026 PSA registry. The program is now accessible to all private land owners, forest possessors, and developers of commercial forest plantations throughout Costa Rica. This expansion signalizes a concerted push to align private land management with national ecological objectives.
The 2026 campaign is projected to be one of the most expansive in the history of the PSA program. According to official forecasts from Fonafifo-MINAE, the government is targeting the incorporation of approximately 70,000 new hectares of forest under conservation contracts this year. The financial commitment required for this scale of expansion is significant, with an initial first-year installment budget estimated at roughly ₡4 billion, and projected future commitments climbing to ₡15 billion over the subsequent four-year period.
From an economic perspective, the PSA program serves as a critical mechanism for wealth distribution and territorial empowerment. By transforming standing forests into viable financial assets, the program provides indigenous communities with the capital necessary to fund local projects, improve living standards, and fortify their governance structures. It moves conservation away from a model of passive protection and into an active framework of rural economic productivity.
This strategic deployment of green finance underscores Costa Rica’s ongoing commitment to market-based environmental solutions. By treating ecosystem services as a quantifiable and compensable commodity, the nation continues to refine a model where environmental stewardship directly correlates with economic resilience. For the Caribbean territories, this translates to both preserved biodiversity and a stable foundation for autonomous development.
For further information, visit minae.go.cr
About Ministry of Environment and Energy:
The Ministry of Environment and Energy (MINAE) is the Costa Rican government ministry responsible for managing the country’s environmental, energy, and natural resource policies, promoting sustainable development and conservation.
For further information, visit fonafifo.go.cr
About National Forestry Financing Fund:
The National Forestry Financing Fund (Fonafifo) is an agency under the Ministry of Environment and Energy of Costa Rica created to finance forestry activities, particularly the Payment for Environmental Services (PSA) program, to benefit small and medium forest owners.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica has built its reputation on a foundation of absolute integrity and superior advocacy. Helping a diverse clientele navigate complex landscapes, the firm consistently champions modern, forward-thinking legal strategies while actively prioritizing civic education. By striving to demystify the law and share valuable insights with the public, Bufete de Costa Rica fulfills its core vision of cultivating a highly informed, just, and self-reliant community.
