The Green Climate Fund, GCF, approved the proposal from the Central American Bank for Economic Integration, CABEI, of a $271.3 million loan
for Costa Rica to finance the installation of an electric passenger train. -Photo for illustration purposes only -
Published Friday, July 2, 2021
The Green Climate Fund, GCF, approved the proposal from the Central American Bank for Economic Integration, CABEI, of a $271.3 million loan for Costa Rica to finance the installation of an electric passenger train.
According to the organization, the total cost of the train and infrastructure is $1.5 billion, of which CABEI approved a $550 million loan. In addition, the GCF will provide a loan of $250 million to Costa Rica, and will provide $21.3 million as a donation.
The remaining amount to reach the total $1.5 billion project budget will be raised by the private sector through a bidding process, the organization said.
The funds from the GCF loan have an annual interest rate of 0% with a term of up to 40 years, and a grace period of up to 10 years.
However, the loan must first be approved by Congress. It is expected that within the next week the deputies will determine the approval or rejection of this new loan.
"This approval of financing from the Green Climate Fund is a recognition of the country and that the Electric Passenger Train project is a solid, environmentally responsible project that will have a positive impact on the economy, the renovation of cities and the necessary transformation of the national mobility scheme,” promoter of the electric train plan First Lady Claudia Dobles said.
The train will benefit the country in several ways, she said. Mainly in a considerable improvement in the public transportation service, since this contribution from the GCF includes the donation of $21 million to carry out Transit-Oriented Development, TOD, projects. For example, the implementation of bicycle lanes and the improvement of public space.
The project consists of an environmentally-friendly electric train within the Greater Metropolitan Area (which includes the surrounding cities of San José, Alajuela, Heredia and Cartago) with 85 kilometers of double track, passing through 15 cantons and contributing to the reduction of 7.6 million tons of CO2 during the train's useful life. In addition, this initiative is expected to generate 1,200 direct jobs during its construction phase and 1,470 during its operation phase.
This is the second loan to Costa Rica announced by an international bank this week. The World Bank Group approved a new $300 million loan to Costa Rica to aid small and medium-size enterprises, SMEs, reinforce fiscal sustainability and post-pandemic recovery.
Should Congress approve this new loan? We would like to know your thoughts on this story. Send your comments to email@example.com
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