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BUSINESS - Friday 11 February 2005
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IDB Approves $16 Million Dollar Loan to Costa Rica

The Inter-American Development Bank today announced the approval of a $16 million loan to Costa Rica for the first phase of a sustainable development program in Atlantic Huetar Region (RHA), a province with potential for tourism and production but also with high levels of poverty and vulnerability to natural disasters.

The RHA, which covers 9,189 square kilometers on the Atlantic Coast, between Nicaragua and Panama, is home to most of Costa Rica’s Afro-descendent and indigenous peoples. This biodiversity-rich region has 32 protected wilderness areas and coastal zones with development potential.

The program, which was designed with support of a grant from the IDB-administered Japan Special Fund, will be carried out in two phases. The first is expected to take four years and cost $18 million, while the second phase would be executed over five years and cost an estimated $30 million.

The main goals are to promote economic and social development projects, reduce risks of disasters, improve natural resource conservation and management, and strengthen governance at the municipal and regional levels.

The economic and social development component will foster diversification of production and job creation in the RHA, focusing on the needs of poor and vulnerable groups, such as women heads of household, campesino settlements and indigenous communities.

Pilot projects will be financed to improve the production of plantains and systems combining forestry and cattle-grazing; as well as small-scale investments in drainage works, access roads and other basic services will support output in campesino settlements.

To promote tourism the program will support the marking of footpaths in protected areas and the drafting of local tourism management plans. It will also finance activities proposed by women’s organizations, such as training in handcraft production and marketing.
 
 
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The program will support measures to reduce the region’s vulnerability to natural risks and mitigate the economic and social impact of disasters. Among other activities it will finance the mapping of the risk of floods in key watersheds, the expansion of the region’s network of hydro-meteorological stations, the development of early warning systems, the prevention of settlements in high-risk areas and the construction of small-scale flood control infrastructure.

The program will also assist the government in its efforts to improve its preparedness and response to emergencies such as the floods that hit the region in January after heavy rains caused rivers to overflow, killing several people and devastating around 280 communities.

Another component will help strengthen the region’s administrative, financial, economic, environmental and social management. To improve municipal governments, it will finance action plans to improve customer service, boost revenues and establish community-based structures to run services such as road maintenance and trash collection and disposal.

The program, which will be carried out by Costa Rica’s Ministry of Planning and Economic Policy, with support from the RHA’s Development Council, will also encourage citizen participation and proposals from community-based groups and canton committees.

These committees will include delegates from the municipal governments, civil society and producer associations. They will receive projects put forward by citizens as well as propose and evaluate other projects to be financed by the program.

All the activities will take place across the RHA, except in the southern canton of Talamanca, which is covered by an IDB-financed sustainable development program for the Sixaola watershed.

The IDB loan is for a 20-year term, with a four-year grace period and a variable, LIBOR-based interest rate.
 

 

 

 

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