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IDB approves US$30 million for Panama City sanitation project

The Inter-American Development Bank today announced the approval of a $30 million loan to Panama for a project to improve sanitation and environmental conditions in its capital city and the Bay of Panama.

The financing will provide additional resources to expand Panama City’s sewer system, a project that has experienced increases in the costs of building materials, equipment and labor due to the construction boom the country has seen in recent years. The IDB first supported the project with a $45 million loan approved in 2006.

Panama has made progress in the project, finishing the construction of 34 kilometers of sewers which have benefitted more than 2,500 families in poor neighborhoods. Nevertheless, more resources are required to complete other infrastructure needed to reduce pollution caused by raw sewage dumped in ravines and rivers crossing the capital.

Some 50 kilometers of sewers are yet to be completed in the outskirts of the city, including areas recently included in the metropolitan region. These works will benefit 7.000 more families. In addition, collectors and interconnectors must be built to catch wastewater going into ravines and rivers.

The project also entails strengthening the state-owned water and sanitation utility, IDAAN, which is executing the project together with Panama’s Health Ministry.

The Panamanian government has secured international support for a second stage of the sanitation project, which calls for building a wastewater treatment plant and an intercepting tunnel along the bay shoreline.