Green Climate Fund Approves US$64.1 Million to CABEI for the financing of the Bio-CLIMA Project in Nicaragua
- 16 November 2020
Bio-CLIMA will contribute to the reduction of 47.3 million tons of greenhouse gases and increase the resilience to climate change of 614,721 people in Nicaragua.
Published by CABEI
Green Climate Fund (FVC for it´s letters in Spanish) in the framework of the 27th meeting of its Board of Directors approved the financing proposal presented by the Central American Bank for Economic Integration (CABEI) for the Bio-CLIMA Project: integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and the Río San Juan biosphere in Nicaragua, for a total amount of US$115.7 million.
The project will contribute to sustainable development with low CO2 emissions in Nicaragua through the transformation of extensive livestock, agriculture and logging into forms of production that avoid deforestation, and that integrate the conservation of ecosystem services with sustainable production to increase the resilience of indigenous peoples and local livelihoods in the Caribbean Region of Nicaragua.
"With this operation CABEI reaffirms its commitment to support its member countries, in this case Nicaragua, in the channeling of financial resources to contribute to the fulfillment of their national commitments under the Paris Agreement, regarding the reduction of Greenhouse Gas (GHG) emissions, and the improvement of climate change adaptation capabilities for their most vulnerable communities," said CABEI's Executive President, Dr. Dante Mossi.
Through Bio-CLIMA, conservation and restoration activities in protected areas will be financed, involving communities and indigenous peoples, through the implementation of business plans for the creation and consolidation of sustainable community enterprises and sustainable forest management plans. These actions will be accompanied by strengthening technical and institutional capacities at a local level, which will facilitate the formulation and implementation of these plans.
The project will reduce 47.3 million tons of Greenhouse Gases (GHG), and will contribute to strengthening the resilience to climate change and reducing the exposure to climate risks of 614,721 people, mainly indigenous and afro-descendants and those in situations of marginalization and poverty.
The FVC's participation in the financing of the Bio-clima project amounts to US$64.1 million, of which US$37.9 million is a loan to the Government of Nicaragua and US$26.1 million is a donation. The total amount of financing will be completed with a CABEI loan to the Government of Nicaragua through the Poverty Reduction and Economic and Social Exclusion Program (PRPEES) for an amount of US$18.9 million, as well as grant resources from the World Bank's Forest Carbon Partnership Facility (FCPF) for an amount of US$24.3 million, and from the Global Environment Facility (GEF) for an amount of US$8.3 million.
As a result of the blending of CABEI and FVC loan resources, the terms of this financing will have a fixed annual interest rate of 0.50% and a term of up to 40 years including a 10-year grace period.
CABEI is an Accredited Direct Access Entity to the Green Climate Fund (FVC) since 2016, and maintains a fruitful relationship with this fund, since the accreditation, which was granted without conditions and that allows CABEI to mobilize resources in all the categories and windows available to the FVC. The Bio-CLIMA Project is the second operation approved by CABEI from the FVC since its accreditation.