Designing Financial Instruments and Incentives Schemes for Panama’s Integrated Landscape Management

Forested mountain landscape new Cerro Punta in Panama

Program Summary

This activity aims to support the Government of Panama (GoP) in strengthening its capacity to identify and develop policies and programs to (i) scale-up ecosystem services restoration, sustainable landscape management, low-carbon development, (ii) attract green and socially conscious private or institutional financing for investment in resilient, inclusive, sustainable, and efficient agricultural/agroforestry value chains in the rural areas1of Panama.


Panama’s forests cover 65% of the country’s territory, making it one of the countries with the highest percentage of forest cover in the world playing a key role in the natural connectivity of essential ecosystems through biological corridors. However, deforestation, although it has slightly decreased in recent years, continues to be one of the main drivers for the loss of Panama’s natural capital and unique biodiversity. A high proportion of forest lost occurring in Panama over 2012-2019 coincides with the country’s poorest and more agriculturally active areas. Notably, several of Panama’s remaining areas of denser forest cover still overlap with areas of 60 – 90 percent employment in agriculture as well as poverty rates of 40 – 100 percent (well above the national poverty rate of 13 percent). Most mature forests in the country are located in indigenous territories. These Indigenous Comarcas present high poverty rates and high forest cover. The Comarca Emberá Wounaan and Comarca Guna Yala, have 98% and 93% respectively, of their land covered by native forest, and the Comarca Ngäbe-Buglé has 70% of the land covered by native forest. Indigenous communities in rural areas are some of the most disadvantaged groups, with over half living in poverty. The consequences of less-efficient production systems and low labor productivity are exacerbated by the elevated level of vulnerability to climate change, which undermines the ability of rural families to secure food and income.


This   PROGREEN engagement supports resilient, inclusive, sustainable and efficient socio-economic development and rural jobs and livelihoods –while ensuring the safeguarding of Panama’s natural capital and biodiversity. Tackling biodiversity and forest cover loss, landscapes and soil deterioration requires a strategic approach and coordinated and bold policy environment and innovative financing instruments for creating sustainable economic opportunities for (i) reducing the socio-economic disparities between country’s rural and urban spaces;(ii) improving and diversifying employment opportunities in key value chains especially for Indigenous  Peoples  and  Afro-descendants in the  rural  space; and  (ii)  reducing  the  ongoing pressure  over  natural  capital  and  unique  biodiversity. 


  • Identify and develop financial instruments for landscape management to strengthen the government’s capacity to identify and develop financial instruments that combine economic growth and conservation of ecosystem services.
  • Promote sustainable agriculture for landscape management to support the development of innovative policy and financial instruments to enable inclusive economic opportunities. In Panama, for example, PROGREEN supported policy reforms to advance forest protection and management, natural protected area management and sustainable agriculture. This work in turn contributed to the approval a US$250 million loan to support the Government of Panama’s program to strengthen institutions for the provision of a more inclusive and sustainable economic recovery from the COVID-19 pandemic.
  • Outreach, knowledge sharing and training activities through the design and delivery of trainings and knowledge sharing activities to enhance landscape management approach.