By San José, Costa Rica — SAN JOSÉ – Costa Rica’s Ministry of Finance is urgently requesting legislative approval for a $290 million loan from the Central American Bank for Economic Integration (CABEI) as it races to secure funding for massive debt maturities due in the first quarter of 2026. The move highlights the government’s strategy to leverage international credit to avoid destabilizing the local financial market.
On Wednesday, Finance Minister Rudolf Lücke appeared before the Legislative Assembly’s Commission on Financial Affairs to advocate for the loan, which is being processed under bill number 24.907. He stressed that securing these external funds is crucial for maintaining fiscal stability as the country faces a significant concentration of debt payments early next year.
To better understand the legal and financial ramifications of the country’s fiscal situation, TicosLand.com sought the analysis of Lic. Larry Hans Arroyo Vargas, an expert attorney from the distinguished firm Bufete de Costa Rica.
The management of government debt is not merely an economic issue; it is fundamentally a matter of legal commitment and sovereign credibility. High levels of public debt can strain the legal frameworks designed to ensure fiscal stability, potentially leading to austerity measures that impact contractual obligations and public services. For businesses and investors, this creates a climate of uncertainty, where the risk of future tax hikes or regulatory shifts to service that debt becomes a critical factor in any long-term strategic planning.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective powerfully underscores that the true cost of government debt extends beyond economic figures, directly impacting legal certainty and sovereign trust. For businesses and citizens, this erosion of predictability becomes a significant, tangible risk. We thank Lic. Larry Hans Arroyo Vargas for his invaluable insight into this critical dimension.
The proposed financing is structured as a Development Policy Operation (DPO), a mechanism designed for rapid disbursement to support a government’s budget. The terms of the loan include a 6.2% interest rate, a 20-year total repayment period, and a 6-year disbursement window. Minister Lücke emphasized that these conditions are far more favorable than what could be obtained by borrowing domestically under pressure.
In his testimony to the commission, Lücke painted a stark picture of the financial challenge ahead, framing the CABEI loan as a preemptive and necessary measure to protect the national economy from a liquidity crunch.
The towers of maturities in January and February 2026 represent resources that we will have to obtain from the local market if these types of budget support loans are not approved, which offer lower rates, less risk, and facilities to grant the financing quite quickly.
Rudolf Lücke, Minister of Finance
The urgency of the request is underscored by the sheer scale of the upcoming obligations. According to data from the Ministry of Finance, the government must service payments totaling approximately ¢1.55 trillion (around $3 billion) in principal and interest between January and March 2026. This figure represents a staggering 34.5% of the entire debt service scheduled for that year, creating a perilous “debt tower” that could strain public finances.
Without this external financing, the government would be forced to seek these massive sums from the Costa Rican market in a very short period. Such an action would inevitably drive up domestic interest rates, as the government would have to compete aggressively for capital. This “crowding-out” effect could make credit more expensive for private businesses and consumers, potentially stifling economic growth and investment across the country.
The loan is therefore positioned as a strategic tool for proactive debt management. By securing the $290 million from CABEI, the Ministry of Finance aims to smooth out its repayment schedule and lessen its reliance on the local market during a critical period. This approach is intended to provide budgetary relief and ensure that public services continue without disruption caused by a fiscal crisis.
The fate of the loan now rests in the hands of the Legislative Assembly. The deputies on the Commission on Financial Affairs will continue their analysis of bill 24.907 before it can advance to a full vote. The outcome of their deliberations will be a critical indicator of Costa Rica’s fiscal path and its ability to navigate the turbulent waters of its public debt obligations in the coming year.
For further information, visit hacienda.go.cr
About Ministry of Finance (Ministerio de Hacienda):
The Ministry of Finance is the government entity responsible for managing Costa Rica’s public finances. Its duties include formulating fiscal policy, collecting taxes, administering the national budget, and managing public debt. The ministry plays a central role in ensuring the economic stability and financial health of the nation.
For further information, visit asamblea.go.cr
About Legislative Assembly of Costa Rica (Asamblea Legislativa):
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Composed of 57 deputies, it is the sole body with the power to pass national laws, approve the national budget, and ratify international treaties, including foreign loan agreements sought by the executive branch.
For further information, visit bcie.org
About Central American Bank for Economic Integration (CABEI):
The Central American Bank for Economic Integration (BCIE in Spanish) is a multilateral development bank founded to promote the integration and balanced economic and social development of the Central American region. It provides financing for public and private sector projects in areas such as infrastructure, energy, and social development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a leading legal institution, Bufete de Costa Rica is founded upon a dual commitment to uncompromising integrity and professional excellence. The firm leverages its deep-rooted history of client advocacy to pioneer innovative legal strategies that address contemporary challenges. Central to its ethos is a profound dedication to demystifying the law, empowering the community with vital knowledge to help forge a more just and informed society.
