FIDA 2000005556 Approve Loan Agreement No. FIDA 2000005556 signed between the International Fund for Agricultural Development and the Republic of Costa Rica to finance the "Programa para una Agricultura Sostenible y Competitiva en Costa Rica", up to the sum of nineteen million two hundred ten thousand four hundred fifty euros (EUR 19,210,450).
The text of the referenced Loan Agreement and its annexes that are attached below, form an integral part of this law.
LOAN No. 2000005556 FINANCING AGREEMENT Programa para agricultura sostenible, y competitiva en Costa Rica between THE REPUBLIC OF COSTA RICA and the INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT Signed in San Jose, Costa Rica, and in Rome, Italy Republic of Costa Rica Programa para agricultura sostenible, y competitiva en Costa Rica (CSMART) Financing Agreement Loan No. 2000005556 FINANCING AGREEMENT Loan Number: 2000005556 Programa para agricultura sostenible, y competitiva en Costa Rica (the "Program" or "CSMART") The Republic of Costa Rica (the "Borrower") and The International Fund for Agricultural Development (the "Fund" or "FIDA") (each individually a "Party" and collectively the "Parties") PREAMBLE WHEREAS the Borrower has requested the Fund to finance the Program and the Fund agrees to provide a loan to support the financing thereof.
WHEREAS the World Bank ("IBRD" or "BM") has demonstrated interest in co-financing the Program. The Borrower shall secure from the World Bank resources of one hundred fifteen million five hundred thousand Euro up to one hundred twenty million United States Dollars (equivalent ?115,500,000) through a co-financing agreement between the Borrower and the BM (the "Acuerdo de Cofinanciación") for the financing of the Program; The Borrower has committed to providing the additional support, financial or in-kind, that may be necessary for the Program; FIDA agrees to grant a loan (Loan) and Therefore, the Parties further agree as follows:
1. This Agreement includes the following: the Main Document (Headings and Sections A-E), the Project Description and Implementation Arrangements (Anexo 1) the Allocation Table (Anexo 2), and Special Commitments (Anexo 3).
2. The General Conditions for Agricultural Development Financing dated April 29, 2009, as amended in December 2022 (the "Condiciones Generales"), unless otherwise indicated, except for the provisions referring to loan financing which shall not apply to this Agreement. For the purposes of this Agreement, the terms defined in the Condiciones Generales shall have the meaning indicated therein.
3. For the purposes of this Agreement:
Financing Agreement "Indicator-Linked Disbursement" or "DLI" means, with respect to a given Category, the indicator that will be used to trigger the disbursement of funds, and as set forth in the tables of Anexo 2 of this Agreement and as will be specified in more detail in the Program Operations Manual (MOP).
"Results-Linked Disbursement" or "DLR" means with respect to a given Category, the result that will be used to trigger the disbursement of funds, as set forth in the tables of Anexo 2 of this Agreement, and as will be specified in more detail in the Program Operations Manual (MOP), upon the achievement of which the amount of the Financing allocated to said result could be withdrawn.
4. Pursuant to this agreement, the Fund will provide the Borrower with a Loan (the "Financing"), which the Borrower shall use to implement the Program in accordance with the terms and conditions of this Agreement.
1. The Financing shall consist of a Loan in euros of nineteen million two hundred ten thousand four hundred fifty (EUR 19,210,450).
2. The Loan is granted on ordinary terms and shall bear interest on the outstanding principal amount of the Loan at a rate equal to the FIDA Reference Interest Rate, including a variable spread, payable semi-annually in the Loan Service Payment Currency, and shall have a maturity period of eighteen (18) years, including a grace period of three (3) years, from the date the Fund has determined that all conditions precedent to the withdrawal of funds have been met.
3. The Loan Service Payment Currency shall be in Euros.
4. The applicable fiscal year shall be from January 1 to December 31.
5. Principal and interest/service charge payments for the Loan shall be payable every six months on the 15th day of May and the 15th day of November.
6. All disbursements from the loan account shall be made to the single treasury account of Costa Rica in dollars. The Borrower shall inform the Fund of the details of this bank account and disbursements shall be made in accordance with the World Bank's disbursement letter.
7. The Borrower shall provide counterpart financing for the Program for an amount equivalent to the budget of the Plan Sectorial Agropecuario del Ministerio de Agricultura y Ganadería in force.
1. The Lead Program Agency is the Ministerio de Agricultura y Ganadería (MAG) which, through the coordination of the Secretaría Ejecutiva de Planificación Sectorial Agropecuaria (SEPSA), shall be responsible for the management and supervision of the Program.
2. The following are designated as Program Parties: Dirección Nacional de Extensión Agropecuaria (DNEA); Servicio Fitosanitario del Estado (SFE); Servicio Nacional de Aguas Sanitarias, Riego y Avenamiento (SENARA); Servicio Nacional de Salud Animal (SENASA); Instituto Nacional de Innovación y Transferencia en Tecnología Agropecuaria (INTA); Instituto Costarricense de Pesca y Acuicultura (INCOPESCA); Programa Integral de Mercadeo Agropecuario (PIMA); and Sistema Banca para el Desarrollo (SBD).
3. The Mid-Term Review shall be carried out as specified in Section 8.03 b) and c) of the Condiciones Generales, and the Parties may agree on another date for carrying out the Mid-Term Review of the Program's implementation, in coordination with the World Bank.
4. The Project Closing Date shall be May 27, 2031, or any other date the Fund may designate by notification to the Borrower.
5. The procurement of goods, works, and services financed by the Financing shall be carried out in accordance with the Borrower's procurement guidelines.
1. The program financing shall be supervised by the World Bank as the Cooperating Institution.
1. The following are designated as additional grounds for suspension of disbursements:
- a)Any of the provisions of the Program Operations Manual (MOP) that have been subject to assignment, waiver, suspension, revocation, amendment, or other modification, without the prior agreement of the Parties, and the BM or FIDA have determined, after consultation with the Borrower, that such assignment, waiver, suspension, revocation, amendment or modification has had substantial adverse consequences for the Program.
- b)In the event that the Borrower has not requested a disbursement of the Financing for a period of at least 18 months without justification.
- c)The Letter of Agreement (LoA) or analogous document with the BM, as defined in Article III of the Condiciones Generales or the Acuerdo de Cofinanciación, has not entered into full force within 180 days following the date of this Agreement.
- d)The Borrower's right to withdraw the funds of the BM Loan has been suspended, canceled, or terminated, in whole or in part; or the BM Loan has matured and is payable before the agreed maturity; or any event has occurred that, with notice or the passage of time, could give rise to any of the foregoing cases.
- e)In the event that the Borrower has not requested a disbursement of the Financing for a period of at least 12 consecutive months without justification after the first 18 months from the entry into force of the Agreement.
2. The following additional grounds for the cancellation of disbursements are designated:
- a)The financing agreement with the BM has been canceled.
3. The following are designated as additional specific conditions precedent to the withdrawal of disbursements:
- a)FIDA's no-objection to the Program Operations Manual (MOP) was obtained.
- b)The Letter of Agreement with the BM, as defined in Article III of the GC or the Acuerdo de Cofinanciación, has entered into full force within 180 days following the date of this Agreement.
- c)The conditions for the withdrawal of disbursements by the BM have been met, and d) Except for the advance, the borrower has provided satisfactory evidence to the BM and FIDA that the respective Results-Linked Disbursements (DLRs) and/or, set forth in Anexo 2 have been achieved and that these were verified through an Independent Verification Agency (IVA).
4. The following articles of the Condiciones Generales are amended to read as follows:
- a)Article VII, Section 7.05 (Procurement); the procurement of goods, works, and services financed with the proceeds of the financing shall be carried out in accordance with the Borrower's financial management and procurement systems.
- b)Article IX, section 9.03 (Audit of accounts); The Program accounts, financial statements, and statements of expenditures shall be audited by independent auditors accepted by the Fund and the BM, in accordance with auditing standards acceptable to the BM.
5. The following exceptions to Section 4.02 a) and Section 4.03 d) of the Condiciones Generales are applicable to the Agreement:
- a)Disbursement shall be triggered by verifiable DLIs or DLRs instead of eligible expenditures; b) The Fund shall not require the Borrower to provide evidence demonstrating that previous withdrawals have been properly spent on eligible expenditures, but rather evidence that the agreed DLIs or DLR have been met; c) or DLR are met; d) The Borrower may withdraw the funds from the Financing to finance Disbursement" or "DLR") achieved by the Borrower, measured against specific indicators ("Indicator-Linked Disbursements" or "DLI") in the allocated amount of the table in the paragraph of Anexo 2.
- e)For clarification purposes, it is understood that Section 4.03 subsections a, b and c shall be interpreted in accordance with Section 3.02.
6. With respect to Section 5.01 subsections b) and d) of the Condiciones Generales de Financiación Agrícola referring to Loan Terms, it is clarified that the chargeable service charges mentioned do not apply for this Program.
7. This Agreement is subject to approval by the legislative branch of the Borrower and its respective publication in the Official Gazette La Gaceta.
8. The designated representatives and their respective addresses to be used for any exchange of communications related to this Agreement are indicated below:
For the Borrower:
Ministerio de Hacienda Calle 1 y 3, Avenida 2 Diagonal al Teatro Nacional San Jose, Costa Rica; Email: [email protected] For the Fund:
President Fondo Internacional de Desarrollo Agrícola Via Paolo di Dono 44 00142 Rome, Italy If applicable, the Parties accept the validity of any electronic signature used in this Agreement and recognize it as equivalent to a handwritten signature.
Republic of Costa Rica Programa para agricultura sostenible, y competitiva en Costa Rica (CSMART) Financing Agreement Loan No. 2000005556 This Agreement has been prepared in the Spanish language in two (2) original copies, one (1) for the Fund and one (1) for the Borrower and shall enter into effect [when FIDA receives notification of the approval by the Legislative Branch and its respective publication in the Official Gazette La Gaceta], pursuant to Section 13.01 of the Condiciones Generales.
REPUBLIC OF COSTA RICA ___________________ D. Nogui Acosta Jaen Ministro de Hacienda Date: _30/07/2025___________ INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT _____________________ Álvaro Lario President Date: _14/08/2025______________ Republic of Costa Rica Programa para agricultura sostenible, y competitiva en Costa Rica (CSMART) Financing Agreement Loan No. 2000005556
Program Description and Implementation Arrangements
I. Program Description
1. Program Area.
The Program has a national scope and is organized according to the territorial division of the MAG, prioritizing those regions where the adoption of Nationally Appropriate Mitigation Actions (NAMAs) in coffee, sugarcane, and livestock farming has a greater contribution to the development of the local economy, and to national and international trade.
In the coffee sector, 93 percent of production comes from four regions:
Centro Oeste, Centro Oriente, Centro Sur, and Brunca. In the sugar sector, 54 percent of sugarcane production is carried out in the Chorotega region, 12 percent in the Huetar Norte region, and 11.5 percent in the Pacífico Central region. Likewise, 75 percent of milk production is mainly concentrated in three regions:
Huetar Norte, Centro Este, and Centro Oeste. The Huetar Norte region is the most specialized in livestock production, with 26 percent of beef cattle production, 44 percent of milk production, and 34 percent of dual-purpose livestock farming. The Huetar Caribe region produces the largest quantity of beef and dual-purpose cattle, without high productive concentration. Likewise, the Program will act in specific geographical areas to support fishermen of the Gulf of Nicoya in the province of Puntarenas (Pacífico Central) and potato, vegetable, flower, and strawberry producers in the north of the province of Cartago (Llano Grande and Tierra Blanca) in the Centro Oriente region. In addition, these geographic areas include the regions with the highest concentration of poverty (Región Huetar Caribe, Región Brunca, Huetar Norte, and Chorotega) and the most weakened populations in coastal areas. Finally, the program also includes actions that will affect the entire national territory, such as the implementation of the agricultural traceability system and the registration system on the producer information digital platform.
2. Project Target Group and Beneficiaries.
The Program will directly benefit 30,000 micro, small, and medium-sized producers, of whom at least 24,000 will be registered in the MAG's platform for small and medium-sized agricultural producers (PYMPA), 9,000 (30 percent) will be women, and 4,500 (15 percent) will be young people. The direct beneficiaries will have access to services such as technical assistance, investments for NAMA adoption, credit, and the traceability system.
Development Objective.
The Program is aimed at achieving the following development objectives: SDG 1: End poverty, through the generation of higher incomes and equity in their distribution; SDG 2: Zero hunger, promoting food security and sustainable agriculture; SDG 5: Gender equality, opening spaces for the participation of women and promoting their economic and social empowerment; SDG 10: Reduce inequalities, considering opportunities for the poorest and most vulnerable in order to reduce their conditions of poverty and marginalization; and SDG 13: Climate action through the Republic of Costa Rica's implementation of NAMA measures for adaptation and resilience to climate change.
Results Areas These objectives will be achieved through the implementation of the following results areas, which correspond to the four axes of the Plan Sectorial Agrícola 2023-2032 (ASP):
Results Area 1 - Modernization of the Agricultural Sector Institutions. The objective of RA1 is to modernize the public agricultural extension services that are key to supporting producers to improve their sustainability, competitiveness, and economic inclusion. Therefore, RA1 is considered cross-cutting, as it supports the achievement of the other three results areas.
Results Area 2 - Promotion of Competitiveness. The objective of RA2 is to promote the competitiveness of agricultural producers through better access to markets (national and international). This will be achieved by improving market information and traceability, increasing institutional capacity to carry out selected environmental and (phyto)sanitary diagnostic assessments, and fostering economic inclusion and improving basic market links with domestic markets, especially for vulnerable groups.
Results Area 3 - Sustainable Production. The objective of RA3 is to improve the environmental sustainability of agricultural production through the expansion of the adoption of three NAMAs of the agricultural sector (livestock, coffee, and sugarcane, due to their readiness for scaling up) and other sustainable practices related to irrigation. This will be achieved by supporting the adoption of NAMAs by producers through technical assistance; improving access to financing for the adoption of NAMAs through a joint mechanism between the Sistema de banca de desarrollo (BDS) and private banks, including for vulnerable groups; and improving the monitoring, reporting, and verification of emissions for the NAMA models. RA3 will also promote sustainable irrigation in dry and climate-vulnerable zones to address critical resilience challenges.
Results Area 4 - Added Value and Marketing. The objective of RA4 is to add value to the environmental benefits generated by the NAMA production models through payments for environmental services (pagos por servicios ambientales). This will help farmers have an additional source of income until the benefits of NAMA adoption materialize, the added value to products coming from the NAMA is consolidated, and new markets are developed.
II. Implementation Arrangements
1. Lead Program Agency.
Ministerio de Agricultura y Ganadería (MAG) 2. Program Technical Coordination Team.
The Secretaría Ejecutiva de Planificación del Sector Agropecuario (SEPSA) of the MAG shall maintain a Program Coordination Team (ECP) throughout the program's implementation. The team shall be responsible for adequately supervising and managing compliance with the terms of the Program's Legal Agreement, as well as for coordinating and supervising the implementation of the Program Action Plan (PAP). The team shall be composed of suitable personnel with the necessary profiles and responsibilities to support the Program's implementation. Other institutions that participate in the Program's implementation shall do so within the framework of their existing framework agreements with MAG. In the case of the SBD, it will be necessary to establish a specific framework agreement for the Program. MAG shall also collaborate with industry associations (for example, CORFOGA, LAICA) through the existing framework agreements.
3. Project and/or Program Parties The following entities are considered Program Parties:
- i)SEPSA: as the lead agency leading, managing, and in charge of the overall coordination of the Program; ii) INCOPESCA and PIMA: entities responsible for contributing to the activities for the achievement of DLI 4; iii) SFE and SENASA entities responsible for contributing to the activities for the achievement of DLI 3; iv) SENARA, entity responsible for contributing to the activities for the achievement of DLI 7; v) SBD, entity responsible for contributing to the activities for the achievement of DLI 6.
To facilitate the implementation of the respective Program Part, the Borrower, through MAG, shall enter into Implementation Agreements between MAG and each Program Party, under the terms and conditions approved by the Bank and the Fund. These shall include the following: (i) if applicable, the terms and conditions under which the Loan funds shall be made available to the Program Party and the Borrower's right to suspend or terminate the Program Party's right to use the Loan funds if it breaches its obligations under the Implementation Agreement; (ii) the obligation of the Program Party to execute its Respective Part of the Program in accordance with the terms of this Agreement and the Program Operations Manual; and (iii) the monitoring and reporting requirements. The Borrower, through MAG, shall exercise its rights under each of the Implementation Agreements in a manner that protects the interests of the Borrower, the Bank, and the Fund, and fulfills the purposes of the Loan. Unless otherwise agreed by the Bank and the Fund, the Borrower, through MAG, shall not assign, amend, abrogate, or waive any of the Implementation Agreements or any of their provisions.
In case of any conflict between the terms of the Implementation Agreements and those of this Financing Agreement, the terms of this Financing Agreement shall prevail.
Likewise, MAG shall be in charge of contributing to the activities that allow the achievement of DLIs 1, 2, 3, 5, 6, and 8.
4. Monitoring and Evaluation MAG, through SEPSA, shall be responsible for the monitoring and evaluation of the program. The planning, monitoring, and evaluation procedures shall take into account the national regulations established by the Ministerio de Planificación Nacional y Política Económica (MIDEPLAN), the Ministerio de Hacienda (MH), and the Contraloría General de la República (CGR); as well as the World Bank's guidelines on this matter.
5. Program Operations Manual (MOP).
A Program Operations Manual will be developed and implemented once the project has been approved. The development of the MOP will be led by SEPSA. The World Bank and FIDA will provide technical support as needed.
6. Report on Particular Indicators for FIDA.
The Borrower, through MAG, commits to providing a report on the following common indicators for all projects with FIDA financing:
| Project type | Core Output Indicators | Comments |
|---|---|---|
| ALL (mandatory) | COI 1: Number of people receiving services promoted or supported by the project · Men · Women · Youth · Indigenous Population | Includes the producers of the supported activities (NAMA, REFRINA, etc.). Annual measurements. |
| COI 1.a: Corresponding number of beneficiary households supported | It is estimated that one producer represents one household, so this indicator is equal to COI 1, even if the person may receive several services. Annual measurements. | |
| COI 1.b: Corresponding estimate of the total number of household members | According to INEC there are 3 members per rural household. Annual measurements. | |
| Stakeholder feedback | 2.1: Households satisfied with the services supported by the project | Measured by survey at mid-term and at the end of the Program according to FIDA's methodology. |
Allocation Table 1. Allocation of Loan resources. The table below presents the "Results-Linked Disbursement" or "DLR" and the "Indicator-Linked Disbursements" or "DLI" that will be financed from the Loan and their respective allocation of the Loan amounts to each respective DLR or DLI.
| Indicator-Linked Disbursements (DLIs) | Results-Linked Disbursement (DLRs) | Lead Agency (LA) Program Parties (PP) |
|---|---|---|
| Disbursements are made once the achievement of results is verified. These disbursements do not depend on or are not attributable to individual/specific transactions or expenses | ||
| DLI #1: Launch of the Digital Producer Information Platform | DLR 1.1: The Digital Producer Information Platform is developed and operational Non-scalable DLR Allocated amount: 672,366 EUR | LA: MAG |
| Total allocated amount: EUR 2,420,517 | DLR 1.2: Completion of information campaigns to publicize the Digital Information Platform for Producers Baseline: 0 information campaigns Scalable DLR Formula: 26,894.63 EUR per completed information campaign, up to 134,473 EUR | |
| DLR 1.3: Producers are registered and active on the Digital Producer Information Platform Baseline: 0 producers Scalable DLR Formula: 53.79 EUR per unit increase in the cumulative number of registered producers whose information is accessible to platform users, up to 1,613,678 EUR. | ||
| Indicator-Linked Disbursements (DLIs) | Results-Linked Disbursement (DLRS) | Lead Agency (LA) Program Parties (PP) |
| Disbursements are made once the achievement of results is verified. These disbursements do not depend on or are attributed to individual/specific transactions or expenses | ||
| DLI #2: Number of extensionists who have completed training in key areas related to sustainability, competitiveness, and inclusion | DLR #2: Extensionists have completed training in key areas related to sustainability, competitiveness, and inclusion Baseline: 0 extensionists Scalable DLR | LA: MAG |
| Total allocated amount: EUR 1,192,048 | Formula: 3,722 EUR per unit increase in the cumulative number of trained extensionists, up to 1,191,048 EUR. | |
| DLI #3: Operationalization of Costa Rica's Trazar-Agro System | DLR 3.1: Number of modules of the Trazar Agro system developed and launched Baseline: 0 Scalable DLR Formula: 134,473.15 EUR per module developed and launched, up to 1,075,785 EUR. | LA: MAG |
| Total allocated amount: | PPs: SENASA, SFE, | |
| EUR 2,689,463 | ||
| DLR 3.2: Number of producers registered (by creating a profile) in the Trazar Agro System | ||
| Baseline: 0 producers | ||
| Scalable DLR | ||
| Formula: 40.34 EUR per unit increase in the cumulative number of registered producers, up to 806,839 EUR. | ||
| DLR 3.3: Number of producers who have obtained at least one (1) of the four (4) key certifications for market access and whose documentation of said certification is entered and reflected in the Trazar-Agro System. | ||
| Baseline: 0 producers | ||
| Scalable DLR | ||
| Formula: EUR 53.79 per unit increase in the cumulative number of producers who have obtained at least one (1) certification that is entered and reflected in the Trazar-Agro System; up to EUR 806,839 |
| Indicator-Linked Disbursements (DLIs) | Results-Linked Disbursement (DLRS) | Lead Agency (LA) Program Parties (PP) |
|---|---|---|
| DLI #4: Commissioning of the cold storage facility | DLR 4.1: Design plan for the cold storage facility completed Non-scalable DLR Allocated amount: 134,473 EUR | LA: MAG |
| CA: PIMA, INCOPESCA | ||
| Total allocated amount: EUR 806,839 | ||
| DLR 4.2: Construction of the cold storage facility is completed according to the finalized design plan. Non-scalable DLR Allocated amount: 403,419 EUR | ||
| DLR 4.3: The cold storage facility is operational Non-scalable DLR Allocated amount: 268,946 EUR | ||
| DLI #5: Operationalization of the NAMAs by the PYMPAs | DLR 5.1: Number of PYMPA receiving technical assistance to adopt NAMAs Baseline: 0 PYMPA Scalable DLR Formula: 121 EUR per unit increase in the cumulative number of PYMPA receiving technical assistance to adopt NAMAs, up to 1,270,771 EUR. | LA: MAG |
| Total allocated amount: EUR 2,689,463 | ||
| DLR 5.2: Number of PYMPA adopting NAMAs Baseline: 0 PYMPA Scalable DLR Formula: 121 EUR per unit increase in the cumulative number of PYMPA adopting NAMAs; up to 1,270,771 EUR. | ||
| DLR 5.3: 3,150 of the PYMPA adopting NAMAs are women (in the case of natural persons), or majority-owned by women (in the case of legal entities). Baseline: 0 women/entities majority-owned by women Non-scalable DLR Allocated amount: 73,960 EUR | ||
| DLR 5.4: 1,575 of the PYMPA adopting NAMAs are youth (in the case of natural persons), or majority-owned by youth (in the case of legal entities). Baseline: 0 Youth/entities majority-owned by youth |
Republic of Costa Rica Program for Sustainable and Competitive Agriculture in Costa Rica (CSMART)
| Disbursement Linked to Indicators (DLIs) | Disbursement Linked to Results (DLRS) | Responsible Body (LA) Program Parts (PP) |
|---|---|---|
| Disbursements are made once the achievement of the results is verified. These disbursements do not depend on or are attributed to individual/specific transactions or expenses | ||
| DLI #6: Launch of the SBD NAMA Financing Program | DLR 6.1: The SBD NAMA Financing Program is operational Non-scalable DLR Allocated amount: 1,613,678 EUR | LA: MAG PP: SBD |
| Total allocated amount: EUR 4,034,195 | DLR 6.2: Number of PYMPAs accessing financing to adopt NAMAs, through the SBD NAMA Financing Program Baseline: 0 PYMPA Scalable DLR Formula: 806.84 EUR per unit increase in the cumulative number of PYMPA accessing financing to adopt NAMAs through the SBD NAMA Financing Program; and up to 2,420,517 EUR. | |
| DLI #7: Modernization of existing irrigation works to improve the sustainability of water resource management in Cartago | DLR 7.1: Final definitive feasibility study and design plans for the modernization of the Cartago Irrigation District completed Non-scalable DLR Allocated amount: 1,344,732 EUR | LA: MAG |
| PP: SENARA | ||
| DLR 7.2: Number of existing irrigation works in the Cartago Irrigation District that have been modernized in accordance with the completed design plan. Baseline: 0 modernized irrigation works Scalable DLR Formula: 134,473 EUR per modernization of existing irrigation works; and up to 1,882,624 EUR. | ||
| Total allocated amount: | ||
| EUR 3,227,356 |
Republic of Costa Rica Program for Sustainable and Competitive Agriculture in Costa Rica (CSMART)
| Disbursement Linked to Indicators (DLIs) | Disbursement Linked to Results (DLRS) | Responsible Body (LA) Program Parts (PP) |
|---|---|---|
| Disbursements are made once the achievement of the results is verified. These disbursements do not depend on or are attributed to individual/specific transactions or expenses | ||
| DLI #8: Launch of the PSA Mechanism for carbon sequestration in agricultural soils | DLR 8.1: The PSA Mechanism for carbon sequestration in agricultural soils is established Non-scalable DLR Allocated amount: 672,366 EUR | LA: MAG |
| Total allocated amount: EUR 2,151,570 | DLR 8.2: The Specific Fund for the PSA Mechanism for carbon sequestration in agricultural soils is designed Non-scalable DLR Allocated amount: 672,366 EUR | |
| DLR 8.3: Number of PYMPA receiving payments under the PSA Mechanism for carbon sequestration in agricultural soils Baseline: 0 PYMPA Scalable DLR Formula: 806.84 EUR per PYMPA receiving payments under the PSE Financing Mechanism; and up to 806,839 EUR |
Advance. It was established that there may be an advance of up to 25% of the IFAD Loan corresponding to four million eight hundred two thousand six hundred thirteen Euro (EUR 4,802,613) which will be disbursed once the conditions agreed with the WB are met.
Specific definitions of the DLIs/DLRs:
1. "Access financing": when a PYMPA receives a credit or benefits from a guarantee to finance the adoption of NAMAs.
2. "Adopt the NAMA" means when the MAG documents that agricultural producers are complying with NAMA practices on at least a part of their holding.
3. "Arenal Tempisque Irrigation District" means the Arenal Tempisque Irrigation District (DRAT), a unit of the National Groundwater, Irrigation and Drainage Service (SENARA) created on March 16, 1984, by Decreto Ejecutivo No. 15321-MAG.
4. "Blue Flag Program" means the Borrower's Programa Bandera Azul Ecológica - PBAE, an inter-institutional program that recognizes exemplary efforts made by actors in promoting sustainable practices, governed by Decreto Ejecutivo No. 36481-MINAET-S dated April 12, 2011, as may be amended by the Borrower from time to time.
5. "Cartago" is a province in central Costa Rica.
6. "Cartago Irrigation District" means the irrigation project planned under this Program, located in the northern zone of the province of Cartago.
7. "Cold storage facility (almacén frigorífico)" means a facility that stores products, such as fresh fish, that need to be kept at a controlled temperature, and which will be designed and built in the central Pacific region of Costa Rica.
8. "Completed or Finalized" means that the final feasibility study and the design plans for the modernization of the Cartago Irrigation District have been approved by the MAG through an official decree.
9. "Training completed (formación completada)" means that the extensionists have completed the training, and their participation has been documented by the MAG, in the following areas: (i) adoption of NAMAs, (ii) registration and use of the agricultural sector traceability system and other digital resources (agromática), (iii) adaptation of extension services to vulnerable groups, and (iv) general business management.
10. "Specific Fund (Fondo Específico)" means a fund to be established within FONAFIFO to finance the PSA Mechanism.
11. "Designed" means that, for the Dedicated Fund, the sources of financing and the flow of funds have been (i) approved by the applicable authorities, and (ii) the respective legal or regulatory approvals have been promulgated or issued, as the case may be.
12. "Developed and Launched" means when a module of the Trazar Agro System has completed technical and operational development plans and has been officially announced as functional at a launch event.
13. "Developed and Operational" means when the Digital Producer Information Platform is integrated with the MAG, SENASA, and SFE systems and users can access and navigate it.
14. "Digital Producer Information Platform (Plataforma Digital de Información al Productor)" means the MAG's Agricultural Extension Information System (Sistema de Información de Extensión Agropecuaria).
15. "Established" means that, for the PSA Mechanism, the scope of application, the recognition of environmental services (servicios ambientales), and the implementation provisions have been (i) designed, (ii) approved by the applicable authorities, and (iii) the respective legal or regulatory approvals have been promulgated or issued, as the case may be.
16. "In operation (En funcionamiento)" means when documentation, such as transaction receipts, is provided from fishers using the cold storage facility.
17. "FONAFIFO" means the Borrower's National Forestry Financing Fund (Fondo Nacional de Financiamiento Forestal), or any successor acceptable to the World Bank or the Fund.
18. "Finalized" means the approval by the MAG, through an official decree, of the design plan for the cold storage facility.
19. "Information campaign (campaña de información)" refers to a campaign to raise awareness and improve the capacity to use the Digital Producer Information Platform, carried out through various communication methods, including face-to-face events, print media, and digital media, for which MAG has submitted a report documenting the campaign activities and the estimated number of people reached.
20. "Implementation agreements (acuerdos de ejecución)" means the implementation agreements (cartas de entendimiento) and the framework agreements (convenios marco), as the case may be, to be entered into between the MAG and each Co-implementing Entity for the execution of the Program.
21. "INCOPESCA" means the Costa Rican Institute of Fisheries and Aquaculture (Instituto Costarricense de Pesca y Acuicultura), or any successor acceptable to the World Bank or the Fund.
22. "INTA" means the Borrower's National Institute for Innovation and Transfer in Agricultural Technology (Instituto Nacional de Innovación y Transferencia en Tecnología Agropecuaria), or any successor acceptable to the World Bank or the Fund.
23. "MAG" means the Borrower's Ministry of Agriculture and Livestock (Ministerio de Agricultura y Ganadería), or any successor acceptable to the World Bank or the Fund.
24. "NAMA" means Nationally Appropriate Mitigation Actions, which are policies with actions and objectives that countries commit to adopt to reduce emissions under the United Nations Framework Convention on Climate Change.
25. "OIRSA" means the Regional International Organization for Agricultural Health (Organismo Internacional Regional de Sanidad Agropecuaria), or any successor acceptable to the World Bank or the Fund.
26. "ONS" means the Borrower's National Seed Office (Oficina Nacional de Semillas), or any successor acceptable to the World Bank or the Fund.
27. "Operational" means when the SBD NAMA Financing Program is accessible to the public and has documented its first credit or guarantee to a PYMPA.
28. "Payment for Environmental Services" or "PSA" (Pagos por Servicios Ambientales) refers to payments to farmers or landowners who have agreed to take certain actions to manage their land or watersheds to provide an ecological service, and which are financed by the National Forestry Financing Fund (FONAFIFO) of the Ministry of Environment and Energy (MINAE) and governed by Ley Forestal Nº 7575 of 1996.
29. "PSA Mechanism (Mecanismo PSA)" refers to a financial mechanism to be designed and established to promote carbon sequestration in agricultural soils through payments to NAMA producers for certified carbon sequestration attributable to their adoption of NAMAs.
30. "PIMA" means the Borrower's Comprehensive Agricultural Marketing Program (Programa Integral de Mercadeo Agropecuario), or any successor thereof acceptable to the World Bank or the Fund.
31. "Program Action Plan (Plan de Acción del Programa)" means the Borrower's plan dated March 11, 2025 and referred to in Section E of Anexo 2 of the World Bank Financing Agreement, as may be amended occasionally with the prior written agreement of the Bank or the Fund.
32. "Program Implementing Entity (Entidad Implementadora del Programa)" refers to MAG, as the main executing entity (equivalent to the Responsible Body for the Project for the Fund), and INCOPESCA, SBD, SFE, SENARA, PIMA, SENASA, and INTA, and any successor of any of them acceptable to the Bank and the Fund; and the term "Program Implementing Entities" (Program Parts for the Fund) refers collectively to all these entities, including any successor of any of them acceptable to the Bank or the Fund.
33. "Program Operations Manual" or "Operations Manual (Manual de Operaciones)" means the manual referred to in Section I.C of Anexo 2 of the World Bank Agreement, as amended periodically with the Bank's agreement; as well as Paragraph 5 of Section II of Anexo I referring to Implementation Provisions of the Financing Agreement between the Fund and the Borrower.
34. "PYMPA" means Costa Rican small and medium-sized agricultural producers classified as such in accordance with Article 9 of Decreto No. 37911-MAG dated August 19, 2013.
35. "PYMPA receiving technical assistance to adopt NAMAs" means livestock, coffee, and sugarcane PYMPAs that have received technical assistance from MAG extensionists enabling them to meet the criteria necessary for their productive activity to be classified as a NAMA.
36. "SBD" means the Development Banking System of Costa Rica (Sistema de Banca para el Desarrollo), or any successor acceptable to the World Bank or the Fund.
37. "SBD NAMA Financing Program": a program tailored and accessible only to PYMPAs to finance the adoption of NAMAs, and consisting of a financing mechanism and a guarantee system.
38. "Registered and Active" means that producers have created a profile on the Digital Producer Information Platform and their information is accessible to platform users.
39. "SENARA" means the Borrower's National Groundwater, Irrigation, and Drainage Service (Servicio Nacional de Aguas Subterráneas, Riego, y Avenamiento), or any successor thereof acceptable to the World Bank or the Fund.
40. "SENASA" means the Borrower's National Animal Health Service (Servicio Nacional de Salud Animal), or any successor thereof acceptable to the World Bank or the Fund.
41. "SEPSA" means the MAG's Executive Secretariat for Agricultural Sector Planning (Secretaría Ejecutiva de Planificación Sectorial Agropecuaria), or any successor body acceptable to the World Bank or the Fund.
42. "Comptroller of Services (Contraloría de Servicios)" means the Comptroller's Offices of Services, or any other entity(ies) or department(s) that the Borrower determines and duly informs the Bank of, through which citizens can submit complaints, claims, or suggestions using channels such as online forms, email, face-to-face visits, or telephone.
43. "SFE" means the Borrower's State Phytosanitary Service (Servicio Fitosanitario del Estado), or any successor thereof acceptable to the World Bank or the Fund.
44. "Trazar-Agro System (Sistema Trazar-Agro)" means OIRSA's Harmonized Regional Agricultural, Aquaculture, and Fisheries Traceability and Registry System (Sistema Regional Armonizado de Trazabilidad y Registro Agropecuario, Acuícola y Pesquero), a traceability system that facilitates the application of regional traceability standards, the registration and control of persons and agricultural, aquaculture, and fisheries establishments, and the monitoring of other traceability operations.
45. "United Nations Framework Convention on Climate Change" means the United Nations Convention of the same name of May 9, 1992.
46. "Verification Agency (Agencia de Verificación)" means the agency and/or consultant(s) of the Borrower to be selected and appointed in accordance with the provisions of Section I.D of Anexo 2 of the World Bank Financing Agreement for the purpose of carrying out the verification of the achievement of the DLRs by the MAG and the Program Implementing Entities; as well as the reference to Section E, numeral 3 of the Financing Agreement between the Fund and the Borrower.
47. "Verification Protocol (Protocolo de Verificación)" means the protocol agreed between the Borrower and the Bank dated March 11, 2025, which sets out the means, procedures, and evidence on which the certification of the achievement of the DLRs will be based, as well as the entities responsible for them, and the content and/or format of the reports to be provided to the Bank in support thereof, which may be amended from time to time with the prior written agreement of the Bank.
48. "Water User Associations (Sociedades de Usuarios de Agua)" means the Water User Associations constituted pursuant to the Water Law of Costa Rica No. 276 of August 27, 1942, and last amended on June 25, 2012, to govern the collective use of public water.
49. "Youth (Jóvenes)": persons with a minimum age of 18 years and a maximum of 35.
Special Commitments
I. General Provisions
In accordance with Section 12.01(a)(xxiii) of the General Conditions, the Fund may suspend, in whole or in part, the right of the Borrower to request withdrawals from the Loan Account if the Borrower has failed to comply with any of the covenants set forth below, and the Fund has determined that such failure has had, or is likely to have, a material adverse effect on the Program:
1. Planning, monitoring, and evaluation. The Borrower, through the MAG, shall ensure that (i) a planning, monitoring, and evaluation (PM&E) system is established within twelve (12) months from the effective date of this Agreement and (ii) semi-annual reports are provided, including the specific Indicators for IFAD described in Anexo I of this Agreement.
2. Gender and Youth. The Borrower, through the MAG, shall ensure that the concerns of women and youth are duly taken into account when implementing the Program and that the participation quotas for women and youth established in the Program design document are met.
3. Concerns of Indigenous Peoples. The Borrower, through the MAG, shall ensure that the concerns of IPs are duly taken into account when executing the Program and, to this end, shall ensure that (a) the Program is carried out in accordance with the applicable provisions of the [relevant national legislation on IPs]; (b) indigenous peoples are adequately and fairly represented in all local planning of Program activities; (c) The rights of IPs are duly respected; (d) IP communities participate in policy dialogue and local governance; (e) The terms of the Declarations, Pacts, and/or Conventions ratified by the Borrower on the matter are respected; (f) The Program shall not involve the invasion of traditional territories used or occupied by indigenous communities.
4. Anti-corruption measures. The Borrower shall ensure that the Program is carried out in accordance with the provisions of the "World Bank Guidelines for Preventing and Combating Fraud and Corruption in Program-for-Results Financing," dated February 1, 2012, and revised on July 10, 2015. For the purposes of this Agreement, a finding of corruption in accordance with the provisions of the "World Bank Guidelines for Preventing and Combating Fraud and Corruption in Program-for-Results" shall be considered a finding of corruption under the "IFAD Policy on the Prevention of Fraud and Corruption in its Activities and Operations." 5. Sexual harassment, sexual exploitation, and abuse. The Borrower and the Project Parties shall ensure that the Project is carried out in accordance with the provisions of the IFAD Policy on Prevention and Response to Sexual Harassment, Sexual Exploitation, and Abuse.
6. Environmental, social, and climate safeguards (ESC). The Borrower, through the MAG, shall ensure that the Program is implemented in accordance with the safeguard provisions specified in the World Bank Agreement and shall ensure that: (a) all Program activities are implemented in strict conformity with the relevant laws/regulations of the Borrower; (b) all Program activities give special consideration to the participation and practices of the population in accordance with IFAD Policy; (c) the free, prior, and informed consent of all persons whose access to land and resources may be affected or hindered by Program activities is obtained.
In the event of unforeseen land acquisition or involuntary resettlement under the Program, the Borrower, through the MAG, shall immediately inform the World Bank and the Fund and prepare the necessary planning documents, which shall be published on the IFAD website and locally; d) women and men shall receive equal remuneration for work of equal value under the Program; e) child labor is not used under the Program; (f) fair treatment, non-discrimination, and equal opportunity for Program workers; (g) the measures included in the Gender Action Plan prepared for the Program are adopted and the necessary resources for its implementation are made available in a timely manner; (h) all necessary and appropriate measures are duly taken to implement the Gender Action Plan to ensure that women can participate in and benefit equitably from the Program; and (i) an easily accessible and responsive program-level grievance redress mechanism is established and effectively operated.
Furthermore, the Borrower, through the MAG, shall ensure clear terms on risk management and the assumption of costs in the event that critical issues arise to safeguard institutional reputation. This must also be included in the Program Operations Manual (MOP).