CABEI signs US$64.1 million agreement with the Green Climate Fund to finance the Bio-CLIMA Project in Nicaragua
The project will reduce the emission of 47.3 million tons of greenhouse gases and increase the resilience to climate change of more than 614,000 indigenous and Afro-descendant communities on the Caribbean Coast of Nicaragua.
Tegucigalpa, August 12 2021.- On Wednesday, the Central American Bank for Economic Integration (CABEI) and the Green Climate Fund (GCF) signed a US$64.1 million financing agreement for the Bio-CLIMA Project to promote forest conservation and restoration in the Bosawás nature reserve and the San Juan River biosphere in Nicaragua.
The total cost of the project is US$116.6 million; the GCF will provide US$64.1 million, of which US$38.0 million is a loan to the Government of Nicaragua and US$26.1 million is a grant, while CABEI will finance US$44.2 million through its Poverty Reduction and Economic and Social Exclusion Program (PRPEES). In addition, there will be an $8.3 million grant from the Global Environment Facility (GEF).
"We are pleased with this agreement with which we reinforce our commitment to support Nicaragua in its efforts to mitigate and adapt to climate change in a particularly vulnerable area such as the Caribbean Coast. The Bio-CLIMA Project is key to conserving these protected areas, which in recent decades have been affected by deforestation," said CABEI Executive President Dr. Dante Mossi.
The project will reduce the emission of 47.3 million tons of greenhouse gases, contribute to strengthening resilience to climate change and reduce the exposure to climate risks of 614,721 people, mainly indigenous and Afro-descendants in socioeconomic vulnerability.
This initiative will contribute to sustainable development with low CO2 emissions through the transformation of extensive cattle ranching, agriculture, and sustainable forest management, integrating the conservation of ecosystem services to increase the resilience of indigenous peoples and local livelihoods.
The resources of the GCF loan have a fixed annual interest rate of 0%. As a result of the blending of CABEI and GCF loan resources, the terms of this financing will have a weighted annual interest rate of 0.81% and a term of up to 40 years including a 10-year grace period.
CABEI is the leading financial institution in the Central American region in mobilizing green resources that contribute to climate change mitigation and adaptation, being the entity accredited before the GCF that has achieved the largest amount in approvals for US$352.2 million, of which US$300.5 million is as a loan and US$51.7 million as a grant. The Bio-CLIMA Project was the second operation approved by the GCF for CABEI since its accreditation in 2016.