Panama floods villages for canal’s water supply
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Panama will submerge 38 villages in the rainforest to create a reservoir intended to secure water for the Panama Canal.
The project, centered around the Limón de Chagres area east of Panama City, will flood 4,600 hectares of land and displace thousands of people who farm beans, corn, and raise livestock. The Panama Canal Authority (ACP) plans to build the Río Indio reservoir to address increasingly frequent droughts that threaten the canal's operation, which handles about 5% of global trade.
Recent water shortages in 2016, 2019, and 2023 already forced the ACP to limit ship traffic and cargo loads. Climate change and the return of the El Niño weather pattern are exacerbating these issues, prompting the need for a new water source. The ACP estimates around 2,500 people will need relocation, promising affected families equivalent land or financial compensation and allocating roughly 1.3 billion euros to support the transfer.
However, local communities believe at least 13,500 people will be displaced and are protesting the project. Environmental groups also worry the reservoir will endanger over 237 bird species, 35 reptiles, and 49 mammals in the Mesoamerican Biological Corridor, a vital network of forests. The ACP plans environmental mitigation measures, including reforestation. A final environmental impact study is scheduled for December 2026.
