Panama needs to invest approximately $1 billion a year in drinking-water and sanitation infrastructure over the next decade, according to an assessment presented by a senior water specialist from the Inter-American Development Bank.
The country currently invests about $350 million annually, leaving an estimated funding gap of $650 million each year, María Eugenia de la Peña, the IDB’s lead water and sanitation specialist, said at an industry symposium in Panama City.
The estimate is not an approved government spending commitment. It represents an assessment of the investment required to repair and expand distribution networks, rehabilitate water-treatment plants, reduce leaks and extend sanitation systems.
Panama’s difficulties are not caused solely by limited funding. De la Peña identified weak long-term planning, deficient procurement processes, shortages of qualified technical personnel and low budget execution as additional barriers.
Wastewater treatment remains a significant concern. According to figures presented at the symposium, only 57.2% of the country’s wastewater receives some form of sanitation treatment. Untreated discharges can contaminate the same watersheds used to supply treatment plants.
The analysis also described IDAAN, Panama’s national water utility, as financially unsustainable under its current model. Its average tariff was placed at $0.28 per cubic metre, while customer revenue covers approximately 70% of operating expenses.
De la Peña proposed gradually converting IDAAN into a wholly state-owned corporation operating under private-sector employment and procurement rules. The proposal does not call for an immediate tariff increase, but recommends developing a pricing structure that recovers operating costs while protecting rural and lower-income communities.
IDAAN director Antonio Tercero said the utility is rehabilitating or expanding more than 41 of Panama’s 55 water-treatment plants. For 2027, it requested more than $200 million for investment and between $100 million and $150 million for operations.
Those planned interventions remain substantially below the nationwide investment level identified by the IDB specialist. The $1 billion estimate has not yet been incorporated into a formal government financing program, and its detailed methodology has not been publicly released.
Sources: La Prensa
