Panama secures US$ 2.3 billion for Canal expansion
By Richard High11 December 2008
The Panama Canal Authority (ACP) has signed a number of loan agreements totalling US$ 2.3 billion for expansion of the Panama Canal, the biggest ongoing infrastructure project in Latin America.
Lenders include the Inter American Development Bank (IDB), the Andean Development Corporation (CAF), International Financial Corporation (ICF), the Japan Bank for International Cooperation (JBIC) and the European Investment Bank (EIB).
Speaking at the signing yesterday (Wednesday) Panamanian president Martín Torrejos said,"I am convinced that besides being a viable project from a necessary point of view to global trade and transcendental to Panama's future, the expansion of the Canal will contribute to the economies in the region."
"A more efficient Canal, capable of handling bigger ships and facilitate transits in less time will expedite the international trade that passes through it, specially from the Americas."
Multilateral and development agency officials in attendance included: Yoshihiko Morita, vice president, Japan Bank for International Cooperation (JBIC); Francisco de Paula Coelho, Latin America and Asia director, European Investment Bank (EIB); Luis Alberto Moreno, president, Inter-American Development Bank (IDB); Enrique Garcia Rodríguez, executive president, Corporación Andina de Fomento (CAF); and, Juan Jose Daboub, World Bank Group managing director, International Finance Corporation (IFC).
Also attending the event was José Miguel Insulza, secretary general of the Organization of American States (OAS).
The total cost of the expansion program is estimated to be US$ 5.25 million. The balance will be generated by canal operation, which serves around 5% of the global maritime freight annually.
The Panama Canal, operational since 1914, is close to reaching its maximum capacity. The expansion works are scheduled to finish in 2014.
The program has four principal components:
- Building a third set of floodgates, including two floodgates complexes and recycle tubs on both ends of the canal.
- Dredging the access channels in the Atlantic and the Pacific.
- Expansion and deepening of the existing navigation channels.
- Increase the maximum functioning level of the Gatún Lake that provides fresh water to the canal.
During the construction phase, which started last year, the expansion program could create up to 7000 direct jobs and 3000 indirect ones.