Panama has moved to overhaul key parts of its public-private partnership framework as the government seeks to accelerate infrastructure investment. The Cabinet approved the proposed changes on September 15, before the government submitted the bill to the National Assembly on September 17.
The Panama PPP legal reform would amend Law 93 of 2019, which established the country’s modern PPP regime. The government wants to shorten project preparation and procurement timelines while attracting more private capital into public infrastructure.
Minister of the Presidency Juan Carlos Orillac said more than six years of implementation had exposed stages that take longer than necessary. The government believes some procedures can be simplified without weakening fiscal, technical or transparency controls.
The proposed changes aim to allow Panama to structure and deliver more projects in less time while improving competition and financing efficiency. The reform comes as the country moves from building its PPP framework towards developing a broader pipeline of projects.
For investors and lenders, the key test will be whether the changes translate into predictable procurement, stronger project preparation and bankable transactions.
Water and social infrastructure enter the PPP framework
One of the most significant proposals would expand the PPP regime to include the National Institute of Aqueducts and Sewers, known as IDAAN, and the Social Security Fund, or CSS.
The change could create new opportunities for private investment in water and social infrastructure. However, the supply, commercialization and distribution of potable water would remain under state responsibility. PPP arrangements could instead support the development and improvement of related public infrastructure.
The bill would also raise the maximum potential PPP contract term from 40 years to 50 years, including extensions. Longer terms could support projects that require extended periods to recover large upfront investments.
This could be particularly relevant for water, healthcare and other social infrastructure. Such projects often require substantial capital but may have limited opportunities to generate revenue directly from users.
Longer contracts also increase the importance of sound project design. Authorities will need clear performance standards, lifecycle costing and appropriate risk allocation. Payment mechanisms, termination provisions and contingent liabilities will also require careful management.
The reform therefore goes beyond faster approvals. It could broaden Panama’s PPP market while changing how long-term infrastructure projects are structured and financed.
Panama’s PPP pipeline moves into delivery
The proposed changes come as Panama’s PPP programme begins moving from framework development into project delivery.
In March 2026, the Ministry of Public Works signed a US$312.3 million PPP contract with Vías del Istmo, S.A. for the rehabilitation, improvement and maintenance of the Western Pan-American Highway. The contract has a 20-year term and represents an important test of the country’s PPP framework.
Panama is also advancing the Centenario Highway project. In June, the PPP governing body approved the final technical report, bidding documents, PPP contract and related annexes. The project, with an estimated initial investment of US$606.5 million, was cleared to proceed to tender.
Social infrastructure is also entering the pipeline. A maximum-security prison project in Pacora has advanced to the feasibility stage under the PPP regime.
The proposed facility would accommodate 2,000 inmates. Its PPP structure covers design, construction, financing, equipment, conservation and maintenance. Core public functions relating to prison administration and security would remain with the state.
These transactions show why the legal reform comes at an important point for Panama. The country is beginning to build experience across transport and social infrastructure rather than relying on a single demonstration project.
Strong project preparation remains critical
Faster procedures alone will not determine whether Panama’s revised PPP regime succeeds. Strong feasibility studies, realistic financial modelling and disciplined risk allocation will remain essential.
The government has already taken steps to strengthen project preparation. In June 2026, Cabinet authorized a framework agreement with the International Finance Corporation to provide advisory services to public institutions on structuring PPP projects.
The arrangement gives public agencies access to specialist support when developing transactions. This could improve project appraisal, financing structures and risk allocation before projects reach the market.
Panama has also received international support to strengthen its PPP institutions. In 2022, the World Bank approved a US$7.5 million programme aimed at improving PPP planning and implementation capacity, including project preparation and institutional systems.
The proposed legal changes could now give Panama a wider platform for PPP delivery. However, the real measure of success will not be the number of legal amendments or shorter approval periods.
Investors will focus on the quality of the projects that reach the market. They will also examine procurement certainty, government-payment obligations, risk allocation and the credibility of project schedules.
If Panama pairs faster procedures with strong project preparation and transparent procurement, the reform could support a more active and credible PPP pipeline.
Source: Ministry of the Presidency of Panama; National Assembly of Panama; Ministry of Public Works; PPP Governing Body.
