Panama and Costa Rica Launch Railway Project to Connect Central America
Panama and Costa Rica sign a railway agreement to boost regional integration, reduce logistics costs, and advance a Central American transport corridor.
A new railway initiative in Central America is gaining momentum after Panama and Costa Rica signed a Memorandum of Understanding aimed at improving regional connectivity, reducing logistics costs, and facilitating trade across borders.
A strategic agreement to boost regional connectivity
On March 19, the Costa Rican Railway Institute (Incofer) and Panama’s National Railway Secretariat formalized the agreement, marking the beginning of a cooperation framework focused on railway interconnection.
According to Costa Rica’s Ministry of Foreign Affairs, the memorandum seeks to promote a strategic alliance and technical collaboration between both countries, laying the groundwork for future integration of railway infrastructure projects.
First step toward a broader Central American corridor
Authorities confirmed that the initial phase of the initiative includes the development of a railway connection between Panama and Costa Rica. However, the long-term vision extends beyond bilateral cooperation.
Henry Faarup, Panama’s National Railway Secretary, emphasized that the project aims to evolve into a regional logistics corridor involving additional Central American countries.
“Costa Rica is our first partner in building something much bigger, but it is not our final destination. We will continue encouraging our neighboring countries to bring this Central American railway logistics corridor to life,” Faarup stated during the signing ceremony.
The agreement also enables both countries to share technical knowledge, align standards, and coordinate feasibility studies to advance the project.
Inspiration from global integration models
Javier Martínez-Acha, Costa Rica’s Minister of Foreign Affairs, highlighted that similar cross-border infrastructure projects have historically supported economic integration in regions such as Europe.
He noted that this initiative represents an opportunity for Central America to write its own chapter in railway development and regional connectivity.
National projects align with regional ambitions
Panama is currently planning the construction of a 475-kilometer railway line with 14 stations, stretching from Albrook to Paso Canoas, covering the entire country. The project is expected to support both passenger and freight transport.
Meanwhile, Costa Rica announced in late November 2025 that it will develop its first metropolitan electric train, following an agreement between the Central American Bank for Economic Integration (CABEI) and South Korea.
In parallel, Guatemala is also moving forward with efforts to reactivate its railway system, with technical studies supported by the United States.
