This project will build resilience to water stress in the cities of Chitre and La Villa de los Santos in Panama to cope with the negative effects of climate variability and climate change. Climate-related risks in Panama Central American countries are highly vulnerable to climate-related risks. Panama's geographic location and extremely variable climate make it especially vulnerable. The Central American Dry Corridor - covering areas in Belize, Costa Rica, El Salvador, Guatemala, Mexico, and Panama - has a marked and lengthy dry season. In the rainy season, drought is always a threat, further exacerbated by climate change and El Nin¿o. Recently, water shortages have seriously affected the area, leading the President of Panama to declare a state of water emergency on August 9, 2015. Panama also set up a high-level commission to design a national water security plan. Building resilience, developing plans To address this challenge, cities need to build resilience in their physical infrastructures, social architecture (designing environments for specific social behaviours), governance structures, financial systems, and ecosystems. This project intends to build resilience to water supply in the face of climate variability and change. The project team's work will help to develop municipal plans in the cities of Chitre and La Villa in the La Villa river basin in the dry arch of Panama. The study will assess the socio-environmental factors affecting water supply and demand by estimating water balance, analyzing underground water sources, and adopting financial instruments and reforestation to mitigate water scarcity. Later, the results will be scaled up in other cities of the Central American Dry Corridor. IDRC and the Government of Panama are supporting the project. The Water Center for the Humid Tropics of Latin America and the Caribbean (CATHALAC), located in Panama, will manage the project.