The Panama Canal Authority (ACP) provided the third quarterly market update, by highlighting key achievements and forward-looking strategies in a call hosted by Managing Director of Emerging Markets Corporate Research at Bank of America Merrill Lynch Anna Milne. ACP Administrator Dr. Ricaurte V\u00e1squez Morales, Chief Financial Advisor (CFO) Victor Vial, as well as Deputy Administrator and Sustainability Officer Ilya Marotta participated.<\/p>\n
\u201cWe are pleased to report that the Panama Canal is operating at full water capacity,\u201d said V\u00e1squez as he kicked off the call, before giving a strategic overview of fiscal year 2025 while underscoring the extraordinary effort of the ACP to keep the canal a safe, reliable, and efficient waterway for its clients.\u00a0 \u201cWe have remained at 50 feet of draft throughout the dry season, and we will continue to have a relatively wet winter, or rainy season for the remainder of the year in preparation of the next dry season in early 2026,\u201d he said.<\/p>\n
V\u00e1squez also addressed shifting trade patterns which have resulted in new investment opportunities for the ACP, including transshipment facilities and a liquified petroleum gas (LPG) pipeline, but he noted that capacity demonstrates a lag due to the volatility of prevailing markets. \u201cLiquified Petroleum Gas, and container transits have increased, and dry-bulk has recovered from last year,\u201d he said.\u00a0 \u201cWhen we look at all that together, we expect that the Panama Canal will be a more diversified facility, entertaining the possibilities of serving the world, not only through the maritime world, but everything associated with the maritime world,\u201d said V\u00e1squez.<\/p>\n
To that end, the ACP Board of Directors has indicated the advancement of the Rio Indio Project. This $1.6 billion reservoir expansion plan would give the canal 15 more transits a day and provide 860-970 million gallons of water per day to the canal\u2019s lakes, offering additional water security to the area during drought. \u201cIn order to perform and execute that project, our main concern is the welfare and well-being of the population,\u201d V\u00e1squez said.<\/p>\n
\u201cWe have a responsibility to provide water to about 50% of the population in Panama. As a consequence of that, the water that we are trying to generate for the future is essentially addressing the water consumption needs of the population and the operations of the Panama Canal. . . .The sustainability of the Panama Canal as a waterway is dependent on having the right tools to manage rainfall,\u201d he said.<\/p>\n
\u201cWe feel we’re well positioned for the future. We continue focusing on our operation and we continue focusing on the financial strength of the company to deliver for the country,\u201d said Vial.\u00a0 He explained that the ACP has been focused on strengthening the balance sheet in order to fund these new investments by significantly decreasing liabilities to reduce the ACP\u2019s debt from $2.6 billion in 2019 to $600 million now, which has resulted in an equity increase.\u00a0 Vial also emphasized the value of new offerings such as the long-term slot allocation (LoTSA) reservation system, which has driven more than $77 million in incremental revenue.\u00a0\u00a0 \u201cWe have managed our costs, looked for productivity, and efficiencies\u2026and worked to make the [canal] more attractive to [clients],\u201d Vial said.<\/p>\n
Additionally, Deputy Administrator Ilya Marotta emphasized the ACP\u2019s sustainability initiatives.\u00a0 She highlighted two major efforts underway including the Net Zero Slot program and the integration of hybrid tugboats. Marotta also shared the ACP\u2019s large engagement efforts to support the community during expansion efforts. \u201cWe have invested over $117 million in these 25 years on [local] communities in different programs,\u201d she explained.\u00a0 \u201cWe started with the reforestation of 50 hectares in 12 different communities. We are also improving the local aqueduct areas, and basic sanitation,\u201d she said.<\/p>\n
The ACP has also provided instruction on sustainable agricultural for 80 families and 11 schools.\u00a0 \u201cWe\u2019ve educated small kids to adults on how to protect the watershed, and it\u2019s been a great growing experience for both of us,\u201d she said. To date, Panama has granted 110 land titles and plans on giving 140 in the next two months with the ACP\u2019s help, according to Marotta.<\/p>\n
Before ending the call, V\u00e1squez highlighted the ACP\u2019s efforts to remain transparent for their clients and the world.\u00a0 \u201cSharing information and opportunities like this market call is the way the Panama Canal has followed, in order to be absolutely transparent and to report to the intendents, and the people that are interested in the business, that we are here, and we are committed to providing a great service and to better the country of Panama,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"