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Panama Canal approves new lake project to ease drought impact

Panama Canal approves new lake project to ease drought impact

Posted on February 25, 2025   |  

Panama Canal board approves funds for a new lake in the Indio River watershed to address drought challenges.

Prolonged droughts in 2023 and 2024 reduce transits and ship drafts, disrupting global trade routes.

Canal officials plan to launch the $1.2 billion project in 2027 and complete it within four years.

Workers will construct a 1.5 billion cubic meter reservoir and an 8.7 km transfer tunnel to enhance water supply to the canal.

The project aims to improve freshwater reserves for Gatún and Alajuela Lakes, ensuring smooth canal operations.

From mid-2023 to late 2024, authorities limited ship transits and drafts, leading to intense competition for passage.

Although full operations resumed in late 2024, shipping traffic has yet to fully recover.

Between September 2024 and January 2025, ships carried 10% less cargo through the canal than the 2019-22 average.



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