Shipping traffic through the Panama Canal is finally rebounding after two years of drought exacerbated by El Niño. But water levels in Lake Gatún – the rain-fed reservoir that feeds it – are still around a foot below normal after reaching record lows in June 2023.
Authorities in charge of the waterway, which accounts for over 3 per cent of Panama’s GDP, are rushing to find solutions. The canal’s deputy administrator told Reuters a $1.6 billion project to build a reservoir on the Rio Indio would be the “most complete solution [to more frequent droughts] in a 50-year horizon”.
The problem? Building a dam would require the relocation of some 2,260 people and could intensify battles between the canal and canalside communities for freshwater supplies.
If it wins approval the project could be completed by 2031. Time is ticking: last year was the third driest in the canal’s 110-year history.