Investors seem pleased with today’s announcement that the Banco Interamericano de Desarrollo has approved US$850 million loan to help rebuild Costa Rica’s roads, bridges, ports, airport, cycle paths and even the Metropolitan Electric Train.
It’s now up to the Legislative Assembly to formally accept this credit or not …
Needless to say President Oscar Arias is encouraging them to approve of this as fast as they can saying that; “we have waited many years to improve our infrastructure.”
US$100 million of the money will be allotted to the Metropolitan Electric Train which will unite San Jose, Heredia, Cartago and Alajuela. This alone could have a dramatic affect on real estate prices in selected ares within the Greater Metropolitan Area. (GMA)
To obtain the loan, the Costa Rican government must commit $200 million for a total investment in Costa Rica infrastructure improvements of over one billion dollars. By anyone’s standards one billion dollars is a significant investment.
Thankfully over the last three years, Costa Rica’s external debt as a percentage of its GDP – gross domestic product (Spanish = PIB or producto interior bruto) has declined from 55% in 2005 to 47% in 2007 so the finance minister Guillermo Zuñiga seemed comfortable that this will have “no immediate effect.”
The debt rating company Moodys also seems comfortable and elevated the credit rating of Costa Rica’s sovereign debt to “Ba1”.
The US$850 million will be dispersed over a five year period so we will not see these improvements overnight but over the next fifteen years.
It was also announced today that Amazon.com would be hiring 300 English speaking full time staff for their new Amazon Support Services Costa Rica, S.R.L. to be opened in Heredia in November and 400 English speaking part time staff for the busy Christmas period.
What was not announced today is that international investors are seeing this news as a huge vote vote of confidence in the future of Costa Rica, so we should see even more businesses from the USA and Europe expanding their operations to Costa Rica and we’ll certainly see even more international real estate investors looking for deals…
What are you waiting for?
Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica’s Guide To Making Money Offshore.
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