A loan-funded program to upgrade water systems in Jacó, Quepos, Manuel Antonio, Limón and Guácimo has reached just 25% completion after seven years, according to a Ministry of Finance report on externally financed public projects. The program is one of five projects the ministry singled out in its review of the first half of 2026. They have been in execution for between seven and nearly 12 years, and several will not meet their current deadlines.
The delays carry a direct cost as Costa Rica has paid $43.7 million in commitment fees, the charges lenders apply to approved loan money that has not yet been disbursed, according to the report. The Coastal Cities Water and Sewer Program, run by the Costa Rican Institute of Aqueducts and Sewers (AyA) with financing from the Central American Bank for Economic Integration (BCIE), was designed to last six years. A 38-month extension pushed its end date to June 2029.
Its six components include upgrades and expansions of the water systems in the five towns and a new building for the National Water Laboratory. The ministry attributed the delays to recurring problems with contracting, design approvals and expropriations. The longest-running project on the list is the Transportation Infrastructure Program of the Ministry of Public Works and Transport (MOPT), financed by a $450 million loan from the Inter-American Development Bank (IDB). It has been in execution for 11.6 years.
By the end of June, $439.83 million of the loan had been committed and $348 million disbursed. The current disbursement deadline is November 2026 under a third extension, and the ministry expects a fourth. The program’s goals hinge on the new highway to San Carlos, where work stalled for six years after the original construction contract was terminated. Work resumed last year on the southern section, which is just over 15% complete, in a sector where Costa Rica’s highway projects have repeatedly run over budget and behind schedule.
MOPT will finance the central section with its own funds after the IDB declined to approve the only bidder. Public Works Minister Efraím Zeledón told the Legislative Assembly’s Treasury Affairs Committee that 17 properties in the central section and four in the southern section still have to be acquired, though he said those parcels are not needed to complete the highway’s main trunk.
Two other AyA projects also made the list. A program to reduce non-revenue water, meaning water that is produced but never billed because of leaks, illegal connections or metering errors, has been underway for 10.8 years and stands at 66% progress, with about $50 million of a $130 million plan executed.
The report cited low bidder participation, tenders declared void, limited capacity to manage several contracts at once and high turnover among specialized staff. AyA President Lourdes Saúrez said in August that the project had accelerated considerably, adding that non-revenue water had fallen four percentage points to about 49% of production and that the target once the work is finished is 38%.
A separate AyA program to expand water supply in the San José metropolitan area, along with urban aqueducts and the Juanito Mora sanitary sewer system, is 55% complete after 8.1 years. Of its 11 works, divided into 18 stages, 10 are finished, three are under construction and five remain in tendering or technical preparation.
The ministry downgraded that program’s condition to critical. It concluded that even a 42-month extension, which moved the disbursement deadline to Oct. 30, 2027, would not give it enough time. The fifth project is the Costa Rican Electricity Institute’s (ICE) Borinquen I geothermal plant near Liberia, Guanacaste, financed by the Japan International Cooperation Agency (JICA). It was originally due for completion in September 2026 and is just over 56% complete after nine years.
As of June, ICE was seeking an extension of at least four years on the loan, and the institute has said the plant will be finished in early 2030. The ministry described the project’s progress as limited. Of the $43.7 million in commitment fees, $23 million went to the IDB, with 67% of that amount tied to the transportation program. Fees to the BCIE totaled $13.5 million across several institutions, and delays at Borinquen I have cost $4.6 million in fees to JICA.
The ministry said disbursement extensions are legitimate tools for managing delays but should be exceptional and technically and financially justified, and should not become a recurring practice. The findings arrive as a national El Niño plan warns of major risks to water supply in the months ahead. MOPT, AyA and ICE had not publicly explained the causes of the delays or the status of their extension requests as of Friday.
