Costa Rica: Better water allocation in the Lake Arenal Watershed (#10)

There were concerns that Lake Arenal in Northern Costa Rica was threatened due to problems of deforestation and possible premature sedimentation, leading the government to take action, resulting in successful national and local benefits in terms of energy produced and area irrigated. The most important lesson learned is the importance of consulting all parties involved before initiating the project to achieve the best result. 


This case study presents the lessons that can be learned from a national attempt to make the most effective dual use (energy and agriculture) of the water resources of Lake Arenal in Northern Costa Rica, the country’s largest water reservoir, and an increasingly important tourist destination.

In the late 1980s, concerns about the Lake, such as the stability of its watershed, problems of deforestation, and possible premature sedimentation, led the Government to create a Lake Watershed Plan in 1996, and a Commission to implement the plan in 1997. The intent was to involve all the interested parties and institutions to make the best use of all resources. However, after four years, the Commission has virtually disappeared, lacking funding and political support.

Lessons learned

The project has yielded successful national and local benefits in terms of energy produced and area irrigated. But these outcomes have not been integrated, either with each other, or with conservation of ecosystems and other environmental sectors.

The Government’s intention was to involve all parties, and they were consulted in the development of the Lake Arenal Watershed Management and Development Plan. However, during implementation, one party – the Instituto Costrariense de Electricidad (ICE) – had so much influence and power, that other parties (e.g. farmers groups and conservationists) felt their participation was useless.

Funding issues were ignored. Legislation creating the Commission omitted all mention of a financial plan for its functioning. Nor was it suggested that the main water users should pay for millions of cubic meters of water used for power generation.

Importance of the case for IWRM

The Arenal project was created with an IWRM vision, with multiple productive uses of water, and related important environmental and natural resource conservation. However, unforeseen legal, institutional and economic outcomes mean that the project’s potential as an IWRM star has yet to be realized.

This may yet happen; the Government is promoting sustainable development, and its growing tourism industry, as well as encouraging protected areas. In this environment, the few large stakeholders simply have too much to lose if they do not engage the smaller interested parties.

Photo credit: Miles Tuttle