Additional US$24.3 million from CABEI to reduce deforestation and strengthen resilience in Bosawás and Río San Juan reserves on Nicaragua's Caribbean Coast
The US$116.6 million project will directly and indirectly benefit 665,821 indigenous and rural community inhabitants.
Tegucigalpa, May 25, 2021.- The Central American Bank for Economic Integration (CABEI) today approved a $24.3 million extension to finance the "Bio-CLIMA Project: Integrated Climate Action to Reduce Deforestation and Strengthen Resilience in the Bosawás and Río San Juan Biosphere Reserves" on Nicaragua's Caribbean Coast.
This project consists of CABEI financing of $44.3 million and $37.9 million from the Green Climate Fund (GCF), as well as $26.1 million in GCF grants and an additional $8.3 million grant from the Global Environment Facility (GEF), for a total project amount of $116.6 million.
CABEI Executive President, Dr. Dante Mossi, said, "We are pleased with the extension of this financing because Bio-CLIMA will directly and indirectly benefit 665,821 inhabitants of the Nicaraguan Caribbean Coast by mitigating the negative effects of climate change and the damage caused in November 2020 by the Eta and Iota storms that affected the area so severely.
Through the Project, 8,417 productive units will be served, in which sustainable production, forest management and reforestation models will be established in an area that will cover an estimated 603,035 hectares. It will also enable the country to increase its carbon absorption capacity by promoting agroecological production of permanent crops under shade; reducing extensive grazing and introducing silvopastoral and cocoa agroforestry systems, among other actions.
The institutions responsible to CABEI for compliance with the objectives and scope of the Project's results, as well as the rational use of allocated resources and respect for the Bank's policies are the Environment and Natural Resources Ministry (MARENA) and the Finance and Public Credit Ministry (MHCP).
This financing is the result of the blending of CABEI and GCF loan resources, resulting in a fixed annual interest rate of 0.81% and a term of up to 40 years, including a 10-year grace period.