The Inter-American Development Bank today announced the approval of an $11 million loan to Costa Rica for a sustainable development program in the binational watershed of the Sixaola River that will complement a similar program on the opposite margin, in the Panamanian province of Bocas del Toro.

Both programs are included in the project portfolio of Plan Puebla Panama, a regional integration and cooperation plan supported by Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama.

The new program, which will be carried out in an area with both a great wealth of natural resources and limitations due to its high vulnerability, is based on three elements Costa Rica and Panama agreed upon after extensive consultations: a regional sustainable development strategy for the watershed; an indicative plan for functional land-use management and a shared vision of development.

The program seeks to raise the living standards of the population of the canton of Talamanca, one of the poorest districts in Costa Rica, home to Bri Bri and Cabecar indigenous communities, Afro-Caribbean groups and Latino settlers.

IDB resources will be used to finance actions to strengthen environmental protection and ensure the sustainable use of the watershed’s natural resources; reduce its vulnerability to natural disasters; diversify rural production; invest in basic infrastructure and increase the management capacity of indigenous communities and institutions at the local, regional and binational levels.

The program, which was designed to maximize community participation, will be carried out by Costa Rica’s Planning Ministry, supported by the Regional Development Council of the Huetar Vertiente Atlántica region and the Sixaola River Basin Committee (CCRS), which will be formed by delegates from public sector agencies, local governments and local civil society groups.

The program’s executive unit will be based in the Sixaola watershed region and will be assisted by three district committees formed by representatives from local communities and indigenous areas. The committees will receive project proposals from environmental and productive organizations, indigenous communities and local governments. As well, they will voice their respective district’s priorities and present annual operations plans to the CCRS. The committees will also monitor the program’s execution.

Program components

Under the environmental management component, the river basin’s residents will choose among projects to control water quality, community protection and control of impacts in protected areas and co-management of protected areas with community participation. The program will also support the reforestation of riverbanks, prevention and mitigation measures against floods and landslides, and community-based early warning systems.

The production diversification component will support alternative crops to the widespread banana and plantain production and will encourage organic farming, environmentally friendly farming methods, productive linkages, market research and marketing, and training. The program will emphasize the participation of women’s groups and the development of a network of rural community ecotourism.

The program will also finance small infrastructure projects to improve the population’s access to basic services. Among other projects, it may support the construction of small drinking water and sewerage systems, solid waste management, rural electrification, rural road resurfacing and small bridges and culverts, small protective works against floods and landslides, community markets, warehouses and centers.

Talamanca municipality’s administrative, financial, planning and service capabilities will be strengthened. The program will also support capacity-building for women groups, indigenous communities, productive associations, community enterprises and other groups based in the Sixaola river basin. It will finance the establishment of the district committees and the CCRS and provide technical assistance to the local delegations of various agencies involved in the regional committee.

Given the Sixaola river basin’s binational character and as a complement Costa Rica’s and Panama’s efforts in the area, a joint program will be prepared for possible financing with IDB-administered resources from the Global Environmental Fund (GEF) to support the monitoring and control of water quality, the recovery of the riverbanks and part of an early warning system.

The program reflects the IDB’s strategy of supporting sustainable development and social inclusion efforts in Costa Rica, particularly in border areas, in order to boost productivity and reduce poverty. The program will complement other projects in the region supported by the GEF and the development agencies of Germany, the Netherlands, Spain and the United States.

The program will also build on Panama’s parallel effort in the Sixaola watershed, the multiphase program for sustainable development in Bocas del Toro. The IDB is supporting that initiative with a $15.2 million loan.

The new loan is for 20 years, with a four-year grace period and an annual interest rate based on LIBOR. Local counterpart funds will total $1,220,000.