| Financier | Commitments |
|---|---|
| International Bank for Reconstruction and Development | 30.00 |
| Local Sources of Borrowing Country | 0.20 |
| PROTOTYPE CARBON FUND | 2.55 |
| Borrower/Recipient | 47.55 |
Mainstreaming Market-Based Instruments for Environmental Management Project
Abstract*
The Mainstreaming Market-Based Instruments for Environmental Management Project enhances the provision of environmental services significant at the national and global levels, and secures their long-term sustainability through a scaled-up payment for environmental services system in Costa Rica. There are three project components. Component 1 develops new sustainable financing mechanisms for the Payment for Environmental Services (PSA) Program through... Show More
Development Objective
The Project Development Objective is to enhance the provision of environmental services of a national and global significance and secure their long-term sustainability through a scaled-up payment for environmental services system in Costa Rica.
Key Details
Project Details
P093384
Closed
Christian Peter
N/A
Costa Rica
November 23, 2005
(as of board presentation)
June 8, 2006
July 31, 2008
US$ 80.30 million
FONAFIFO
2006
US$ 32.55 million
B
March 15, 2022
March 31, 2014
BANK APPROVED
Finances
Financing Plan (US$ Millions)
Total Project Financing (US$ Millions)
| Product Line | IBRD/IDA |
|---|---|
| IBRD Commitment | 30.00 |
| IDA Commitment | N/A |
| IBRD + IDA Commitment | 30.00 |
| Lending Instrument | |
|---|---|
| Grant Amount | 2.55 |
| Total Project Cost** | 80.30 |
Summary Status of World Bank Financing (US$ Millions) as of March 31, 2025
No data available.
| Period | Financier | Transaction Type | Amount (US$) |
|---|---|---|---|
| Nov 15, 2013 | IBRD-73880 | Int Charges | 72,023.72 |
| Nov 15, 2013 | IBRD-73880 | Loan Repay | 1,371,576.50 |
| Dec 19, 2013 | IBRD-73880 | Loan Disb | 2,219,004.80 |
| Sep 23, 2013 | IBRD-73880 | Loan Disb | 2,991,047.00 |
| Nov 15, 2014 | IBRD-73880 | Int Charges | 70,106.36 |
| Nov 15, 2014 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| Jun 8, 2006 | IBRD-73880 | Loan Commitment | 30,000,000.00 |
| Nov 15, 2020 | IBRD-73880 | Int Charges | 16,327.38 |
| Nov 15, 2020 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2021 | IBRD-73880 | Int Charges | 4,313.43 |
| May 15, 2021 | IBRD-73880 | Loan Repay | 1,715,838.10 |
| May 15, 2020 | IBRD-73880 | Int Charges | 56,542.40 |
| May 15, 2020 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| Nov 15, 2019 | IBRD-73880 | Int Charges | 99,766.82 |
| Nov 15, 2019 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2019 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2019 | IBRD-73880 | Int Charges | 134,350.77 |
| Nov 15, 2018 | IBRD-73880 | Int Charges | 145,984.73 |
| Nov 15, 2018 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2018 | IBRD-73880 | Int Charges | 113,108.77 |
| May 15, 2018 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| Nov 15, 2017 | IBRD-73880 | Int Charges | 118,764.64 |
| Nov 15, 2017 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2017 | IBRD-73880 | Int Charges | 117,436.22 |
| May 15, 2017 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| Nov 15, 2016 | IBRD-73880 | Int Charges | 101,903.52 |
| Nov 15, 2016 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2016 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2016 | IBRD-73880 | Int Charges | 81,246.32 |
| Nov 15, 2015 | IBRD-73880 | Int Charges | 69,577.66 |
| Nov 15, 2015 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2015 | IBRD-73880 | Int Charges | 65,160.14 |
| May 15, 2015 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2014 | IBRD-73880 | Int Charges | 77,796.78 |
| May 15, 2014 | IBRD-73880 | Loan Repay | 1,719,087.00 |
| May 15, 2014 | IBRD-73880 | Int Charges | 1,085.77 |
| May 15, 2014 | IBRD-73880 | Int Charges | 1,908.60 |
| May 15, 2014 | IBRD-73880 | Int Charges | 516.76 |
| Nov 15, 2013 | IBRD-73880 | Int Charges | 1,189.74 |
| Nov 15, 2013 | IBRD-73880 | Int Charges | 2,525.52 |
| Nov 15, 2013 | IBRD-73880 | Int Charges | 7,019.90 |
Ratings
IMPLEMENTATION RATINGS
| Name | Review | Date |
|---|---|---|
| Procurement | Satisfactory | 2014-03-26 |
| Overall Implementation Progress (IP) | Moderately Satisfactory | 2014-03-26 |
| Financial Management | Moderately Satisfactory | 2014-03-26 |
| Counterpart Funding | Satisfactory | 2014-03-26 |
| Project Management | Satisfactory | 2014-03-26 |
| Progress towards achievement of PDO | Satisfactory | 2014-03-26 |
| Monitoring and Evaluation | Satisfactory | 2014-03-26 |
COMPLETION RATINGS
| INDICATOR | IMPLEMENTATION COMPLETION & RESULTS REPORT: 09-29-2014 |
|---|---|
| Outcomes | |
| Risk to Development Outcome | Substantial |
| Bank Performance | |
| Borrower Performance | |
| Government Performance | |
| Implementing Agency |
INDEPENDENT EVALUATION RATINGS
| INDICATOR | ICR REVIEW: 05-07-2015 | PROJECT PERFORMANCE ASSESSMENT REPORT: |
|---|---|---|
| Outcome Rating | Moderately Satisfactory | N/a |
| Risk To Development Outcome | Significant | N/a |
| Bank Performance | Moderately Unsatisfactory | N/a |
| Borrower Performance | Moderately Satisfactory | N/a |
| Government Performance | Moderately Satisfactory | N/a |
| Implementing Agency | Moderately Satisfactory | N/a |
| Icr Quality | Satisfactory | N/a |
| M&e Quality | Negligible | N/a |
Results Framework
PROJECT DEVELOPMENT OBJECTIVE INDICATORS
| INDICATOR | BASELINE | CURRENT | TARGET |
|---|
Areas brought under enhanced biodiversity protection (ha) Value 250000.00 297432.00 310000.00 Date June 8, 2006 March 13, 2014 March 31, 2014 Comment This CSI has been introduced to address the fact that the original indicator was selected at a time when there were no CSIs. Thevalues are similar to the previous indicators. By the end of the project, at least 288,000 hectares of land with environmental service contracts generating environmental servicesof local, national and/or global importance. Value 250,000 ha 297,432 ha 310,000 ha Date June 8, 2006 March 13, 2014 March 31, 2014 Comment The unit of measure is hectares (ha) and not text as indicated to the side Earlier high enrollment rates in the PSA program (340,000 ha in 2012), due to the availability of additional funding provided bythe World Bank loan and by contributions from other donors, has led to an overhang of obligations, which has limited enrollmentsover the past two years. As a result, the target of 310,000 ha (revised in the 2012 restructuring) could not been reached. Costa Rica’s National Development Plan has a target of conserving a total of 310,000 ha a year using PSA. By the end of the project, conservation of at least 35,000 ha is financed annually by funding from service users Value 7400.00 24543.00 35000.00 Date June 8, 2006 March 13, 2014 March 31, 2014 Comment This is the revised version of the indicator: By the end of the project, at least half of the newly-contracted area is financed byfunding from service users. During the project life the EOP target had been overachieved (e.g. 41,000 ha in 2010), but because of the annual nature of most ofFONAFIFO’s budget and the five-year length of most of its conservation contracts, Costa Rica's PSA program is subject to widefluctuations in the areas under conservation. Improved efficiency of the environmental services program, as measured by indices of services generated per dollar spent.(Index under preparation) Value Indicator dropped. Indicator dropped. Date April 30, 2013 March 31, 2014 Comment Dropped-tracking this indicator has been found extremely difficult. This is primarily due to the technical difficulty ofquantifying the changes in the level of environmental service provision. Dropped-tracking this indicator has been found extremely difficult. This is primarily due to the technical difficulty ofquantifying the changes in the level of environmental service provision. By the end of the project 50% increase (from current 1,900 to 2,850) of the number of small- and medium-sized landholders (less than 100-hectare farms) participating in the PSA Program. Value 1,900 landholders (small- and medium-sized) 4,729 3,500 Date June 8, 2006 March 13, 2014 March 31, 2014 Comment This indicator was increased to 3,500 in the 2012 Restructuring. By the end of the project, at least half of the newly-contracted area is financed by funding from service users. Value 0% 24,543 35,000 Date June 8, 2006 March 13, 2014 March 31, 2014 Comment Target was revised in June 2012 from its original target of 50%, in part because generating financing from service users hasproven much more challenging than expected (particularly so in the case of carbon financing and biodiversity payments), butprimarily because fuel tax revenues have increased dramatically due to the increase in traffic, resulting in an automatic increasein government funding to the PSA program.
INTERMEDIATE RESULTS INDICATORS
| INDICATOR | BASELINE | CURRENT | TARGET |
|---|
At least 75% of PSA Program resources are placed in PSA contracts. Value Present percentage to be evaluated during year 1 o 77% 75% Date June 8, 2006 March 13, 2014 March 31, 2014 Comment The unit of measure is percent and not text as indicated to the side Contract system for payments of environmental services with differentiated payments applied. Value Does not exist System operational and working System is approved and under implementation Date June 8, 2006 March 13, 2014 March 31, 2014 Comment PSA activities are integrated through participatory planning on land use in at least 3 (micro-watershed) communities. Value 0 micro-watersheds 1 micro-watershed 3 micro-watersheds Date June 8, 2006 April 30, 2013 March 31, 2014 Comment 2 land-use plans for additional micro-watersheds are under preparation tons of CO2 from forestry activities will be certified and sold at the global carbon markets Value 0.00 23084.00 238239.00 Date June 28, 2012 March 13, 2014 March 31, 2014 Comment At the end of the project 23,084 tons of CO2 from forestry activities were certified sold at the global carbon markets, forUS$95.798.Following appraisal of the project (and the two year delay in becoming effective), the annual emission reductiongeneration proved to be significantly lower. The primary causes for the shortage of CertifiedEmission Reductions (CERs) are twofold: (i) requirements for verification and certification of emission reductions are more stringent and take longer thananticipated at appraisal tocarry out, and (ii) a decline in CER prices, more or less coinciding with the financial crisis, affectedthe proper functioning of theactivity. Revenues achieved Value 0.00 95798.00 900000.00 Date June 28, 2012 March 13, 2014 March 31, 2014 Comment Female landholders in the program will be maintained at least to the current level. Value 474.00 877.00 800.00 Date June 8, 2006 March 13, 2014 March 31, 2014 Comment Indigenous community owned lands in the program will be maintained at least to the current level. Value 25125.00 47572.00 43000.00 Date June 8, 2006 March 6, 2014 March 31, 2014 Comment % of annual net returns from the FBS invested in PES at productive landscape projects located in buffer zones of protected areas and biological corridors Value 0.00 0.00 85.00 Date June 28, 2012 March 13, 2014 March 31, 2014 Comment Given the low returns on the investment following the financial crisis, FONAFIFO was not able to invest any of the FBS return byproject closing. At least 190,000 ha (2,000 contracts) in productive landscapes in the buffer zones of protected areas and biological corridors in the MBC are maintained annually under PSA contracts of 20 years. Value 100,000 ha 146,074 ha 190,000 ha Date June 8, 2006 March 13, 2014 March 31, 2014 Comment Because of the annual nature of most of FONAFIFO’s budget and the five-year length of most of its conservation contracts, CostaRica's PSA program is subject to wide fluctuations in the areas under conservation. Effective biodiversity conservation in globally significant areas measured by vegetation cover and indicator species of conservation interest (method under preparation, baseline to be ready by 12/07). Value 0 Indicator dropped Indicator dropped Date June 8, 2006 April 30, 2013 March 31, 2014 Comment This indicator has proven difficult to measure and has been dropped as part of the June 2012 restructuring. 3.5% from fuel-tax revenues and 25% water-resource-usage tariffs to finance PSA. Value 3.5%0% 3.5%25% 3.5%25% Date June 8, 2006 March 13, 2014 March 31, 2014 Comment % of fuel-tax revenues and % of tax used from water-resource tariff and colones (₡) of revenue received from tax 3.5% fuel (₡12.831m)25% water (₡982m) 3.5% fuel 25% water FBS with capital participation of at least US$15 million, of which US$7.5 million contributed by GEF. Value US$0 US$18.5 million total of which US$9.1 million from US$15 million total of which US$7.5 million from G Date June 8, 2006 March 13, 2014 March 31, 2014 Comment The indicator is US$ and not text as indicated to the side The Fund has been capitalized with the GEF and KfW contribution. Its capitalization exceeds the target of US$15 million. However,current returns (at 2%) are below expectation and addressing this will be a priority over the next 6 months. The FBS board hasinitiated a number of steps to address this issue, including (i) negotiating a lower management fee for the investment institution(Banco Nacional de CR); (ii) consolidating all funding received in one account to improve the effectiveness of applying theinvestment strategy; and (iii) introduce the possibility of using an international fund manager.