The World Bank’s Executive Board on Tuesday approved a $300 million loan to help Costa Rica improve fiscal efficiency and promote sustainable economic growth.

The Washington-based lender said the funds will support measures to strengthen tax collection, enhance public spending, and improve debt management. The loan also aims to stimulate green economic activities that create jobs, particularly in rural and coastal areas.

The financing comes with a variable interest rate and a 33.5-year maturity, including a six-year grace period, according to officials.

“The support from the World Bank allows us to accelerate the modernization of our fiscal and environmental policies to consolidate Costa Rica as a regional benchmark in sustainability and financial responsibility,” Finance Minister Rudolf Lücke Bolaños said in a statement. “This joint effort will translate into better services for citizens, especially in health, education, and environmental protection.”

The World Bank said the program will focus on three core areas of fiscal policy:

• Tax collection: improving equity by tightening oversight of exemptions.

• Spending efficiency: implementing results-based budgeting.

• Debt management: developing capital markets and securing access to better financing conditions.

On the environmental side, the loan will expand Costa Rica’s Payment for Environmental Services program to cover biodiversity, water, and marine ecosystems. It will also fund a national livestock traceability system, designed to strengthen sustainable agriculture and ecotourism.

“Linking conservation with income generation offers a scalable model for job creation and community resilience,” the World Bank said. “This approach seeks to ensure the participation of vulnerable groups, including women and indigenous communities, in environmental programs.”

The Bank emphasized that such initiatives are key as Costa Rica transitions toward a climate-resilient economy, supporting more stable and sustainable livelihoods.

Costa Rica ended 2024 with a fiscal deficit equal to 3.8% of GDP, up from 3.3% in 2023, according to the Finance Ministry. Officials attributed the increase mainly to debt interest payments, which reached 4.8% of GDP. For the year, government revenues totaled 15.1% of GDP, while expenditures stood at 18.9%.

This loan follows the International Monetary Fund’s approval in June of a $1.5 billion loan to Costa Rica under its Flexible Credit Line program.

The Ministry of Finance is the state public organization that oversees fiscal policy and public resource management to improve the country's efficiency and accountability.