Panama moves forward with water, sanitation, and energy reforms with IDB support

The second Reform Support Program will contribute to the sustainability of the energy sector and the increase in drinking water and sanitation coverage

The Inter-American Development Bank (IDB) approved a $200 million budget-support operation linked to the second Reform Support Program for Panama’s energy and water and sanitation sectors.

The program aims to contribute to the sustainability of the energy sector and to increase coverage and improve drinking water and sanitation service management through a series of policy reforms aimed at strengthening and complementing the regulatory and institutional framework of both sectors.

In water and sanitation, the program hopes to improve inter-agency coordination through support in strategic planning and clear role assignment. The water and sanitation management model will also be enhanced through the strengthening of inter-agency coordination and public policy instruments. These actions will support the goals of the national water security plan.

In the energy sector, the program will support the implementation of the Energy Transition Agenda to improve energy security through matrix diversification, increased efficiency, and regional integration. The project also hopes to improve the financial and social sustainability of the energy sector by using innovative technologies and strengthening institutional capacity in energy planning and purchasing.

The IDB-funded program is expected to benefit all Panamanians by developing a more sustainable, diversified, less polluting energy matrix that is more resilient to climate change. As for water and sanitation services, it is hoped that by 2030, 100% of households will have 24/7 access to potable water and all urban households will have access to sewerage.

The approved financing will have an initial disbursement period of one year, with a depreciation period of 20 years, 5.5 years of grace period and interest rate based on LIBOR.