Costa Rica approves landmark law to unlock new financing for protected areas

Costa Rica has taken a major step toward securing sustainable financing for its protected areas. The country’s Legislative Assembly has approved Law 10,898, enabling the securitization of future revenues generated by its National System of Conservation Areas (SINAC) and unlocking new investment opportunities for biodiversity protection.

The reform, an amendment to the national Biodiversity Law, creates the legal foundation to convert future income from protected-area entrance fees into upfront capital by issuing thematic financial instruments, such as green or sustainability bonds. This mechanism allows Costa Rica to mobilize immediate resources for conservation without increasing public debt.

From concept to implementation

The approval marks the culmination of a multi-year national effort to strengthen protected area financing. Earlier phases focused on designing and validating the mechanism, including technical feasibility studies and legal structuring. In recent years, attention has shifted to building the enabling legal framework to support diversified financial flows.

With the adoption of Law 10,898, Costa Rica moves from concept to implementation—establishing one of the most advanced examples globally of innovation in biodiversity finance.

UNDP’s Biodiversity Finance Initiative (BIOFIN) supported this achievement through technical assistance, financial analysis, and feasibility studies, helping design a solution that is both effective and sustainable.

As Sandra Sosa, Resident Representative of UNDP in Costa Rica, noted: “This legal reform marks a turning point for biodiversity finance in Costa Rica. By creating the regulatory clarity needed to mobilize private and thematic investment, the country is transforming stable nature-based revenues into long-term solutions for conservation. UNDP is proud to have supported this effort, which strengthens protected areas while contributing to resilient human development and supporting local communities that depend on them.”

Turning future revenues into present-day investment

Costa Rica’s protected areas are among the most visited in the world, generating stable and predictable revenue streams from tourism. The new law enables the country to leverage these future cash flows by converting them into immediate financing for priority investments.

Revenues from visitor entrance fees will be reinvested directly into protected areas, supporting:

• Investment in infrastructure
• Strengthened conservation management systems
• Improved visitor services and sustainable tourism experiences
• Enhanced protection and management of wildlife

By securitizing these future flows, Costa Rica can raise capital to invest across its network of 169 protected areas, ensuring that nature-based revenues are strategically reinvested to deliver both ecological and economic returns.

The reform is also expected to improve the attractiveness and accessibility of protected areas, increasing visitor numbers and creating demand for services in surrounding communities. In addition, the government will be able to grant concessions for non-essential services, such as cafés and souvenir shops, by providing improved infrastructure.

Innovation amid global and fiscal pressures

In recent years, Costa Rica’s sovereign debt has constrained public investment across multiple sectors, including conservation activities managed by SINAC. At the same time, shifting global conditions and the risk of declining international funding have increased the urgency of mobilizing private capital.

Against this backdrop, the reform strengthens the long-term financial sustainability of protected areas while reducing reliance on external funding. By establishing the legal basis for a securitization trust fund, the mechanism avoids creating additional sovereign debt. Instead, it makes more strategic use of existing revenue streams, an approach gaining relevance as countries seek to close the global biodiversity finance gap.

Manuel Morales, the lead congressperson who presented the bill, emphasized the importance of financial innovation in a constrained fiscal context:

“As parliamentarians, our responsibility is to provide the country with modern tools that ensure legal certainty for environmental investment. Costa Rica shows that protecting nature and achieving financial efficiency can and should go hand in hand. This law enables the State to invest in conservation and improve services in protected areas, using the resources generated by our natural heritage without creating new public debt.”

Aligned with global biodiversity goals

Costa Rica’s approach aligns closely with the Kunming–Montreal Global Biodiversity Framework, particularly Target 19, which calls for mobilizing at least US$200 billion annually for biodiversity from all sources.

By advancing innovative financial mechanisms and strengthening domestic resource mobilization, the country demonstrates how global biodiversity commitments can be translated into concrete national action.

A replicable model for other countries

As governments worldwide look for ways to bridge biodiversity financing gaps, Costa Rica’s model offers a practical and replicable solution.

Securitization of future revenue streams, widely used in infrastructure and financial markets, has now been successfully adapted to the conservation sector. With the right legal frameworks, institutional capacity, and reliable revenue streams, other countries could adopt similar approaches to unlock financing for nature.

Costa Rica’s leadership reinforces its position as a global pioneer in environmental policy. This milestone not only strengthens the financial sustainability of its protected areas but also demonstrates how revenues from nature can be reinvested into conservation, infrastructure, and community well-being, advancing resilient and inclusive development.