Loans for a sustainable way of doing business

Tourism and trading in agricultural products such as pineapples, bananas and coffee make up most of Costa Rica's economic output. More than 90 % of the companies involved in these sectors are SMEs. Many of them use outdated methods to produce, process and export their products, which places an additional strain on the environment and climate. The Costa Rican government wants to help make production in the country more sustainable. With the help of KfW, it has set up an environmental line of credit that provides financial assistance for companies to make their production and processing activities more environmentally friendly and effective.

KfW is providing EUR 30 million of its own funds to finance the line of credit, with a portion of the interest subsidised by the German Federal Ministry for Economic Cooperation and Development (BMZ). This money helps Costa Rica's national development bank Banco Nacional de Costa Rica (BNCR) issue loans to SMEs if they invest in efficient and environmentally friendly technologies. An advisory fund was also set up to help interested companies plan environmentally friendly investments.

1,200 coffee farmers benefit from increased takings

This includes the "Asociación de Productores Acosta y Aserri", a cooperative in the canton of Acosta that grows coffee for the German company "Hochland Kaffee". The cooperative was granted a loan and invested around EUR 100,000 in a modern coffee processing facility that conserves water and can be heated using coffee cherry skins. This reduces the volume of firewood used by 50 %.

As a result, the facility helps preserve the climate, benefits the environment and saves costs. "This investment enabled us to improve production so that we now achieve top prices of up to USD 2,000 per sack of coffee beans. The extra income directly benefits our approximately 1,200 coffee farmers and their families," said Ivan Segura, the cooperative's financial director.

The "Savegre Lodge" eco-hotel has also updated its facilities. It has invested around EUR 500,000, among other things in certified wood as a construction material as well as water treatment and biogas facilities. "The low-interest loans from BNCR allow us to run our hotel in a way that is even more sustainable, and as a result attract environmentally conscious tourists from all over the world," reported Rolando Chacón, who is from the second generation of the family to run the hotel.

Costa Rica pursuing ambitious targets for protecting the environment and climate

Costa Rica needs these kinds of investments that preserve the environment and climate. After all, the country is highly reliant on agriculture and susceptible to the effects of climate change. In recent years, extreme weather events such as torrential rain and droughts have hit Costa Rica increasingly hard. That is why the government has set itself ambitious targets for protecting the environment and climate.

The sustainable production methods promoted by KfW support these goals. "We are not only providing finance but also raising awareness of environmental issues," is the assessment of Oliver Polleti, the responsible project manager. This is so that the small Central American country can continue producing the customary quality of coffee and attract environmentally conscious tourists from all over the world in the future too.