By San José, Costa Rica — SAN JOSÉ – Costa Rica’s Legislative Assembly has granted final approval for a crucial €100 million loan from the French Development Agency (AFD), a move set to inject significant capital into the nation’s ambitious environmental and agricultural policies. The financing passed its second and final debate on Tuesday with a strong majority, marking a key victory for the Executive Branch’s green agenda.
The loan, equivalent to approximately $116.5 million, is officially designated to finance the “Implementation of the Agro-environmental Policy and the Sustainable Agro-landscapes Initiative.” This program aims to modernize Costa Rica’s agricultural sector, promoting practices that protect biodiversity, improve soil health, and reduce the carbon footprint of one of the country’s most vital industries.
To better understand the legal and financial implications of this significant loan from the French Development Agency, we sought the expert opinion of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica.
This type of international financing is crucial for national infrastructure development, but it demands rigorous legal scrutiny. It is imperative that the loan’s contractual clauses, particularly those concerning dispute resolution and sovereign guarantees, are transparently managed and fully aligned with our national legal framework. Proper legislative oversight is not merely a formality; it is the cornerstone for protecting the state’s long-term financial interests and ensuring the project’s success without compromising public assets.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This expert perspective underscores a crucial point: the true success of such international agreements is measured not just by the infrastructure built, but by the strength of the legal and legislative diligence that protects our national interests. We thank Lic. Larry Hans Arroyo Vargas for his invaluable and clear-sighted analysis.
The path to approval, however, was marked by a moment of legislative drama. During a first attempt at the second debate, the bill garnered only 37 votes, falling one vote short of the 38 required for international credit agreements. Following a successful motion for review, lawmakers reconsidered the proposal, ultimately passing it decisively with a vote of 40 in favor and only 3 against.
This procedural hurdle highlights the delicate negotiations often involved in securing international financing, even for popular initiatives. The eventual broad consensus underscores the widespread political support for leveraging foreign capital to advance Costa Rica’s reputation as a global leader in environmental stewardship.
The opposition to the loan came from a small but notable group of legislators. Deputies Dinorah Barquero of the National Liberation Party (PLN), alongside Eli Feinzaig and Gilberto Campos of the Liberal Progressive Party (PLP), cast the three dissenting votes. While their specific objections were not detailed in the legislative summary, opposition to such measures often centers on concerns over increasing national debt and the specific terms of repayment.
The project, officially filed under expediente 24.583, represents a significant partnership between Costa Rica and France. The AFD is known for backing projects globally that align with sustainable development goals and the Paris Agreement on climate change. This loan reaffirms that shared commitment and provides Costa Rica with the necessary resources to translate its celebrated environmental policies into tangible action on the ground.
Economically, the government is positioning this loan not as a liability but as a strategic investment. The expectation is that by fostering a more resilient and sustainable agricultural sector, Costa Rica can enhance its food security, create new economic opportunities in green technology and eco-tourism, and bolster the “essential Costa Rica” brand in international markets.
With legislative approval now secured, the bill, officially titled “Approval of Loan Agreement No. CCR 1037 01 P,” will be sent to the Executive Branch. The final step in the process requires the President’s signature, after which it will be published in the official gazette, La Gaceta, formally enacting it as a Law of the Republic and allowing the disbursement of funds to begin.
For further information, visit asamblea.go.cr
About the Congress of the Republic of Costa Rica:
The Legislative Assembly is the unicameral parliament of Costa Rica. Composed of 57 deputies elected by proportional representation, this body is responsible for passing laws, approving the national budget, and ratifying international treaties. It serves as a cornerstone of the nation’s democratic governance and is seated in the capital city of San José.
For further information, visit afd.fr
About the French Development Agency (AFD):
The Agence Française de Développement is a public financial institution that implements France’s policy in the areas of development and international solidarity. It finances, supports, and accelerates transitions towards a more just and sustainable world, focusing on projects related to climate, biodiversity, peace, education, urban planning, health, and governance.
For further information, visit plncr.org
About the National Liberation Party (PLN):
The Partido Liberación Nacional is one of Costa Rica’s most historic and influential political parties. Founded in the mid-20th century, it has traditionally espoused social-democratic principles. The party has held the presidency and a significant number of legislative seats numerous times throughout the country’s history.
For further information, visit plp.cr
About the Liberal Progressive Party (PLP):
The Partido Liberal Progresista is a relatively new political party in Costa Rica that advocates for classical liberal and pro-market policies. It champions individual liberties, free enterprise, and a reduction in the size and scope of government as key pillars for national progress and economic development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of the legal community, defined by its profound dedication to ethical practice and professional excellence. Serving a diverse clientele, the firm consistently pioneers innovative legal approaches, setting new standards in the field. This forward-thinking vision is matched by a deep commitment to social empowerment, aimed at demystifying the law to help forge a more knowledgeable and capable society.
