PANAMA Trends and Developments Contributed by: Kharla Aizpurúa Olmos, Mónica Moreno and Eduardo Oteiza, Morgan & Morgan
project will span approximately 475 kilometres, con- necting Panama City with key major cities across the country, extending nearly to the Costa Rica border. It will include 14 stations and introduce a new mode of transportation to a network that currently relies heav- ily on a single, somewhat obsolete road system. The railway is expected to support both passenger and freight trains. Although the financing structure remains unclear, it has now emerged that several countries and insti- tutions are competing to participate in the funding. These include Mizuho Bank from Japan, the Euro- pean Investment Bank, and multilateral organisations and firms from China, Spain, and the United States, among others. The total cost of the project is project- ed to exceed USD6 billion, bolstering opportunities for interested entities and investors. The main drivers behind the implementation of the project include its direct impact on Panama’s labour market. Construction, which is expected to start in 2026, aims to generate between 10,000 and 15,000 direct jobs during the construction phase, and create approximately 50,000 direct and indirect employment opportunities. These benefits will extend not only to those working directly on the project, but also to sur- rounding communities, which are likely to experi- ence economic revitalisation, increased tourism, and expanded opportunities for employment and invest- ment. In the medium term, the railway could also serve as a catalyst for enhancing connectivity and trade, not only within Panama, but also across the broader region.
A project of this magnitude naturally presents chal- lenges, particularly from an environmental perspective. Its nationwide scope also offers a unique opportunity to set new standards for sustainable infrastructure development. While the construction is expected to have a significant environmental impact, responsible planning and execution can help minimise disruption. Additionally, while the project’s high cost has drawn scrutiny from political opposition, with critics argu- ing that the funds could be allocated to more socially impactful initiatives, at the same time it also repre- sents a long-term investment in national connectivity, competitiveness and development. All things considered, the construction of the Pana- ma-David railway presents compelling opportunities for investment and financing. If successfully imple- mented, managed, and operated, the project could not only deliver long-term economic benefits but also strengthen Panama’s PPP framework, serving as a replicable model for future infrastructure initiatives.
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