According to the WB, the proposed DPL supports the Government of Costa Rica’s efforts to (i) enhance the efficiency of fiscal management; and (ii) support the transition to a green and climate resilient economy.

The development objective of Fiscal Management and Green Growth Project for Costa Rica is to support the Government of Costa Rica's efforts to (i) enhance the efficiency of fiscal management; and (ii) support the transition to a green and climate resilient economy. The Government of Costa Rica has key strategies to enhance the efficiency of fiscal management and support the transition to a greener and more climate resilient economy. The new DPL series and this specific operation are therefore well aligned with the government program. Pillar 1 is linked to the MTFF's and MTDS' targets of enhanced domestic revenue mobilization (Prior Action (PA) 1), more effective and efficient public spending (PA2), and a more diversified domestic debt market (PA3). Pillar 2 is tightly connected to the NDP and NACC through its focus on innovative nature-based solutions and protection of coastal landscapes, a key asset in climate resilience. Both pillars are also aligned with the PNDIP. The operation is also well aligned with the World Bank Group's 2024-2028 Country Partnership Framework (CPF) for Costa Rica. The operation also aligns with the goals of the Paris Agreement. This new DPL series complements ongoing operations and TA engagements. This operation incorporates lessons learned from previous engagements. Specifically, it builds on a solid knowledge base including the 2019 WB Public Finance Review and the 2022 WB Systematic Country Diagnostic update that helped identify and select impactful areas for engagement.

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