New IDB Program to Strengthen Sanitation and Protect Water Resources in Panama

WASHINGTON — The Board of Executive Directors of the Inter-American Development Bank (IDB) approved a $95 million investment loan to improve environmental conditions in the Panama Metropolitan Area and the Districts of Arraiján and La Chorrera, while supporting the implementation of Panama’s Sustainable Financing Framework.

The program will directly benefit approximately 310,000 people through expanded access to sanitation services.

The operation will support a series of initiatives in Panama Bay and the Metropolitan Area, including:

• Rehabilitation of the Amador sanitary sewerage system;
• Design and construction of sanitation infrastructure in areas surrounding Condado del Rey;
• Design, construction, operation, and maintenance of the Caimito wastewater treatment plant and the Dos Líneas facilities (Phase 1); and
• Complementary works to promote the reuse of by-products from the Juan Díaz wastewater treatment plant.

The project will also continue supporting the design and construction of the Matansillo River main interceptor, as well as project management, technical assistance, and supervision for the design, construction, operation, and maintenance of the wastewater collection, conveyance, and treatment system serving West Arraiján and La Chorrera.

In addition, the funds will finance the upgrading of the Interactive Environmental Education Center and provide training to the Panama Sanitation Program Coordinating Unit (UCPSP) in contract management and risk management focused on the design of climate-resilient sanitation projects.

The area’s overall population will benefit indirectly from improved watercourses, while the UCPSP will strengthen its institutional capacity in project management, risk management, and environmental sustainability.

This is the first individual operation under a $210 million Conditional Credit Line for Investment Projects (CCLIP), which aims to help improve sanitary and environmental conditions in the provinces of Panama and West Panama.

The $95 million loan has an 18-year repayment term, a 6.5-year grace period, an interest rate based on SOFR, and a local counterpart contribution of $172.4 million.