Panama Approves $250.9 Million Loan with CAF for Sanitation Expansion

The Cabinet Council approved on Tuesday the signing of a loan for $250,917,421.00 to finance the “Panama Sanitation System Improvement and Expansion Program – First Loan,” the government reported.  The Presidency said in a statement that “the Cabinet Council approved Decree No. 23-25, which authorizes the signing of the loan agreement between the Republic of Panama, represented by the Ministry of Economy and Finance (MEF), and the Andean Development Corporation (CAF).”  This agreement will be subject to a 6-month SOFR reference interest rate payable semi-annually, plus an applicable margin of up to 1.95% and a term of 20 years. The CAF will finance up to eighty-five (85) basis points (bps) non-refundable of the established interest rate during the first eight (8) years counted from the effective date of the loan. 

The note states that the program’s objective is to improve quality of life through priority investments to expand and optimize the country’s sanitation infrastructure, promoting public health, environmental sustainability, and sustainable economic development.  The project aims to reduce pollution in Panama’s urban rivers and coastal areas through proper wastewater treatment, thereby reducing the incidence of waterborne diseases and improving public health in urban areas.  It also includes the preparation of pre-investment studies required to contribute to the continuity of quality, cost-effective, and timely investments in the sanitation sector. It will also strengthen the institutional and operational capacities of the entities responsible for sanitation management to ensure the long-term technical and financial sustainability of infrastructure.  The document also authorizes the signing of the Uncommitted Non-Revolving Credit Line Framework Agreement, for the sum of up to $491,066,335.00.

Panama will host CAF’s 2nd Latin American Economic Forum in 2026.

The first edition was attended by more than 1,500 participants from the region. Panama will host the Second Latin American Economic Forum in January 2026, a high-level event that will bring together global and regional leaders to discuss and develop strategies to promote sustainable development, an official source announced.  During the 10th Summit of Heads of State of the Countries and Territories of the Association of Caribbean States (ACS), in the city of Montería, Colombia, the Panamanian president, José Raúl Mulino, held a bilateral meeting with the executive president of the Development Bank of Latin America and the Caribbean (CAF), Sergio Díaz-Granados, according to a statement from the Presidency. 

At the meeting, the senior executive informed Mulino that the multilateral financial institution will host the Latin American Economic Forum in Panama for the second consecutive year, with the participation of important business groups in the region.  The first edition was attended by more than 1,500 participants from the region, including 250 international panelists and nearly 300 CAF specialists, who identified and promoted innovative strategies to strengthen institutions, as well as innovation and digitalization.  According to CAF, the region remains trapped in a cycle of low growth, high informality, and, above all, marked inequality. Thirty-two percent of Latin Americans live in poverty, while half of the workforce works in the informal sector, without access to the basic benefits that allow them to get ahead.