The World Bank (WB) decided to approve a $150 million loan to promote green and sustainable growth and increase climate resilience in Panama.

This is the first loan in a programmatic series of two operations for development policies that seek to support green growth, resilience, and an inclusive development model in the country.

With this operation, the World Bank supports measures to categorize public spending using climate change labels, in order to improve its efficiency and strengthen institutional capacity to incorporate climate change mitigation and adaptation criteria in management, budgeting, and spending.

In addition, with this project it supports the decarbonization of land transport, advances in the implementation of energy efficiency policies, forest conservation and the protection of the oceans.

It seeks to increase Panama’s resilience to climate change and protect its natural capital by supporting better forest management and watershed protection policies, as well as encouraging the adoption of more demanding energy efficiency parameters.

It will also include the application of policies with a gender perspective in the areas of rural electrification, renewable energy and digital connectivity, which make Panama a model within the countries of Central America and the region.

Michel Kerf, director of the World Bank for Central America and the Dominican Republic, in a statement commented that “this new operation will help the country move towards its goal of building a more inclusive and resilient economy for the benefit of all Panamanians.”

“Panama has enormous natural capital that, together with its social and cultural diversity and its geographical location, offers great opportunities to promote integrated, inclusive and environmentally sustainable economic development,” Kerf said.

Héctor Alexander, Minister of Economy and Finance of Panama, said that this financial operation will redouble the efforts that Panama is carrying out to establish the regulatory bases that promote sustainable economic growth, with a low level of emissions and resilience in the face of climate change.

He also said that he places Panama as one of the countries that promotes the transition towards clean energy, socially inclusive growth with low carbon emissions, and technological innovation to better respond to climate emergencies.

“Panama supports efforts aimed at sustaining natural capital in favor of resilient growth by strengthening climate management and improving institutional capacity to move forward with its climate change mitigation and adaptation program,” said Alexander.

The development policy loan was designed around two pillars:

Pillar I: Support reforms to achieve the energy transition and socially inclusive growth with low carbon emissions.

Pillar II: Establish the regulatory bases to sustain natural capital in favor of resilient growth.

The World Bank expects that the policy reforms included in the project will generate results around 2025, such as maintaining Panama’s position as a carbon neutral country, expanding access to energy and internet services in remote regions, and strengthening control of deforestation in mangroves.