Costa Rica’s Future Flows Securitization Bill for Protected Areas provides a replicable model for unlocking public-private finance

Costa Rica has taken a significant step towards strengthening biodiversity finance. On 24 February 2025, the Environment Commission of the Legislative Assembly approved the SINAC Future Flows Securitization Bill (File 23.896).

This legislation enables the National System of Conservation Areas (SINAC) to securitize future revenue from entrance fees to protected areas, allowing it to access funding today based on projected future earnings. By issuing green or sustainable bonds in the stock market, SINAC can raise capital without increasing public debt, ensuring that protected areas receive much-needed investment in infrastructure and community development.

How it works: unlocking conservation finance

With this authorization, SINAC can establish a Special Purpose Vehicle - a dedicated financial entity that will issue green or sustainable bonds in the stock market. This mechanism allows for the mobilization of private capital, attracting multiple investors who will contribute funds in exchange for repayment over time.

Key aspects of the Special Purpose Vehicle model include:

• Raising investment from multiple stakeholders: Investors purchase the bonds, providing immediate capital for conservation projects.
• Structured repayment through "ceded future flows": Over time, a percentage of revenue from visitor entrance fees to protected areas will be allocated to repay investors, covering both the principal amount and agreed-upon interest.
• Ensuring transparency and impact reporting: Investors will receive regular reports on how their contributions are driving biodiversity conservation and sustainable infrastructure development.

By leveraging future revenue in this way, Costa Rica ensures that investment in protected area infrastructure is accelerated, without the need for new sovereign debt or additional public spending.

Why it matters: bridging the biodiversity finance gap

Costa Rica is a global leader in conservation, with 166 protected areas safeguarding its rich biodiversity. However, these areas face ongoing financial challenges that limit essential infrastructure improvements, sustainable tourism management, and community-based conservation efforts.

The newly approved securitization mechanism provides an innovative solution:

• Enhancing protected area infrastructure: Funds raised through the bond will improve visitor facilities, ranger stations, and essential services, ensuring sustainable tourism aligned with each ecosystem’s carrying capacity.
• Strengthening local communities: Revenue generated will promote green jobs and sustainable economic opportunities, reducing reliance on illegal activities like wildlife extraction, hunting, and mining.
• Ensuring long-term financial sustainability: By unlocking private finance, Costa Rica can advance conservation efforts without depending solely on public budget allocations.

Photo credit: J. Amill Santiago. Guy crossing a hanging bridge within the Cloud Forest in La Fortuna, Costa Rica. August 2021

BIOFIN’s role in pioneering biodiversity finance solutions

The United Nations Development Programme’s Biodiversity Finance Initiative (BIOFIN) played a key role in developing this financial model. Through its technical expertise and feasibility studies, BIOFIN helped design the trust structure needed for securitization, ensuring that SINAC’s future revenue could be leveraged efficiently and sustainably.

This initiative aligns with Global Biodiversity Framework (GBF) Target 19, which calls for innovative financial solutions to close the biodiversity finance gap. By demonstrating how nature-positive financial strategies can be integrated into national legislation, Costa Rica sets a valuable precedent for global conservation finance efforts.

A model for the future

The approval of this bill is more than just a milestone for Costa Rica - it serves as a global case study in innovative biodiversity finance. As governments worldwide seek ways to fund conservation amid fiscal constraints, public-private financial mechanisms like the SINAC Future Flows Securitization Model offer a replicable path forward.

By pioneering new conservation finance tools, Costa Rica reaffirms its commitment to sustainability, ensuring that its protected areas thrive for generations to come. By leveraging private investment, Costa Rica is safeguarding its world-renowned biodiversity and creating sustainable economic opportunities for local communities.