Published on and written by Cyril Jarnias
Panama, nestled between the Atlantic and Pacific Oceans, is not only a global trade hub but also a pioneer in sustainable development. As the country looks toward the future, green real estate standards are being reinvented for 2025, with a focus on eco-friendly practices and energy-efficient structures.
With innovative government initiatives, Panama is committed not only to reducing its carbon footprint but also to incentivizing developers and buyers to adopt these new standards through a wide range of grants and tax benefits.
This article explores current and upcoming strategies, offering an overview of the transformations shaping the real estate sector, while highlighting the importance of an integrated ecological approach to Panamanian urban development.
Overview of Green Construction in Panama
Overview of Green Construction in Panama: Trends, Materials, and 2025 Outlook
Recent Trends in Sustainable Construction
- Growing emphasis on reducing the carbon footprint of buildings.
- Development of eco-districts and eco-lodges incorporating bioclimatic practices.
- Integration of renewable energy solutions and smart technologies for energy management.
Commonly Used Eco-Friendly Materials
| Material | Key Advantages | Use in Panama |
|---|---|---|
| Bamboo | Renewable, lightweight, flexible | Load-bearing structures, frames |
| Raw Earth | Excellent thermal insulation | Walls, plasters, rural homes |
| Local Wood | Low carbon emissions, durable | Flooring, frameworks, cladding |
| Recycled Concrete | Waste reduction, strong | Slabs, load-bearing walls |
Integration of Green Technologies by Local Entrepreneurs
- Installation of solar panels for energy self-consumption.
- Rainwater harvesting and reuse for irrigation and sanitation.
- Use of natural ventilation systems and enhanced thermal insulation.
- Deployment of home automation to optimize energy consumption.
Government Initiatives and the Role of NGOs
- Grants and tax incentives planned under the 2025 standards to encourage green construction.
- Establishment of national standards aligned with international benchmarks for energy performance and use of local materials.
- Professional training programs supported by the government and NGOs to disseminate green construction techniques.
- NGOs play a key role in raising awareness, supporting community projects, and creating local supply chains for eco-friendly materials.
Concrete Examples of Successful Projects
- Construction of eco-villages using bamboo and raw earth in rural provinces.
- Hotel complexes integrating solar energy, organic waste management, and bio-based materials.
- Pilot projects for green social housing carried out in partnership between municipalities, NGOs, and local businesses.
Challenges to Widespread Adoption of Green Construction
- High initial cost of green technologies and innovative materials.
- Lack of specialized training and skilled labor.
- Cultural resistance to adopting alternative techniques.
- Need to intensify awareness among the public and professionals.
Alignment with 2025 Standards and Subsidies
- Panamanian efforts are part of a framework of strengthened environmental standards for 2025, aiming for a measurable reduction in the carbon footprint of buildings.
- Targeted subsidies facilitate access to eco-friendly materials and green technologies for residential and public projects.
- The state and NGOs are committed to accelerating the transition through training and labeling of exemplary projects.
The future prospects of green construction in Panama rely on the synergy between technological innovations, the valorization of local materials, and collective mobilization for a healthier and more sustainable living environment.
Good to Know:
In Panama, green construction is experiencing notable growth with the use of eco-friendly materials like bamboo and raw earth, valued for their durability and low carbon footprint. Local entrepreneurs are increasingly integrating green technologies, such as solar panels and water management systems, to minimize the environmental impact of their projects. The Panamanian government supports these practices through initiatives aimed at standardizing sustainable construction norms and offers subsidies for projects aligned with the 2025 environmental goals. NGOs also play a crucial role in raising public awareness and promoting sustainable development. However, the widespread adoption of green construction is hindered by the high costs of green technologies and the need to increase consumer awareness. Projects like the “Casa Abierta” residential complex illustrate the potential successes of these practices, but the country must overcome significant challenges to fully achieve its ambitions in sustainable construction.
Subsidies for Renewable Energy
Types of Subsidies and Incentives in Panama for Renewable Energy
- Tax Exemptions:
- Law 417 (2023) expands the incentive framework for the solar sector, including tax exemptions and reductions in import duties on all equipment or materials related to solar projects. These benefits apply to both new constructions and ongoing projects, with a specific time window to file exemption requests.
- Dedicated Tenders:
- Long-term project calls exclusively reserved for renewable energies (solar, wind, hydro) are being implemented. The 500 MW call represents an estimated investment of nearly 400 million USD and now includes battery storage.
- Direct Subsidies:
- Public subsidies of up to 250,000 USD can be granted to companies developing or upgrading infrastructure using renewable energy.
Impact on Green Real Estate
Government aid allows:
- To offset a significant portion of the initial extra cost associated with integrating renewable technologies into construction or renovation.
- To attract investors and developers toward sustainable development by reducing the total cost of green operations.
Observed concrete effects:
- The reduction in overall cost fosters the emergence of certified “green” buildings, particularly in the high-end residential and commercial sectors.
- Tax exemptions accelerate the profitability of green investments.
| Type of Aid | Beneficiaries | Main Effect |
|---|---|---|
| Tax Exemption | Developers & Individuals | Reduction in material/equipment cost |
| Customs Duty Relief | Importing Companies | Facilitates access to technology |
| Direct Subsidy | Developers/Real Estate Projects | Partial compensation of extra cost |
| Tender | Energy Producers | Secures long-term sale |
Recent Statistics & Examples
- Proportion of green real estate benefiting from aid: Approximately 35% of new eco-certified buildings now integrate at least one renewable energy system thanks to these subsidies (mainly solar photovoltaic or small wind).
- Notable Examples:
- The “Pacifica Green Towers” residential complex installed over 600 kWp of solar following the new tax framework adopted in January 2024; estimated savings: more than 120,000 USD/year on its energy bill.
- Several eco-hotels in the Canal region have benefited since mid-2024 from subsidies covering up to 20% of the total solar installation cost, enabling a return on investment of less than five years.
Government incentives play a key role in initial financing, significantly lowering the economic barrier to greening real estate.
National Targets for the 2025 Horizon
- Achieve notable additional installed capacity through structured tenders (several hundred MW awarded between end of 2025 and early 2026).
- Aim for approximately 30% minimum of the national electricity mix directly from renewable sources, with a rapid increase expected in distributed solar energy (intermediate target: 1.7 GW installed before the end of the decade).
Current incentive mechanisms are designed to support this goal: they facilitate mass adoption by all types of economic actors—including real estate developers—by making the shift to low-carbon consumption financially attractive.
Good to Know:
In Panama, subsidies for renewable energy include tax incentives such as VAT exemptions and income tax reductions for investments in renewable energy, as well as financial support programs for installing green technologies. These incentives help significantly reduce construction and renovation costs for buildings by integrating renewable energy solutions, which is crucial for the development of green real estate. Currently, about 30% of new real estate projects in Panama utilize renewable energy thanks to these subsidies. A notable example is the Ciudad Futuro sustainable development project, which was able to use subsidized solar panels to provide green electricity to its residents. By 2025, Panama aims for 70% of its building stock to incorporate renewable energy solutions, a goal supported by these subsidies that encourage the mass adoption of green technologies and contribute to a national strategy for reducing carbon emissions.
BREEAM Certifications in Panama
The adoption of BREEAM standards in Panama dates back to the early 2010s, with a growing desire to align the real estate sector with international best practices in sustainable development. The first initiatives were driven by innovative developers, often supported by international partnerships. Among the pioneering projects are several office buildings and residential complexes that achieved BREEAM “Good” or “Very Good” certification, marking a first step toward the widespread adoption of these standards.
Specific Criteria to Meet
- Responsible management of the construction site and building
- Energy efficiency (reduction of carbon emissions)
- Optimized water management
- Promotion of health and well-being for occupants
- Sustainable material selection
- Waste reduction and valorization
- Transport optimization (accessibility, soft mobility)
- Preservation of local ecology and biodiversity
These requirements are evaluated through a five-step process: selection of a BREEAM-accredited assessor, project registration, detailed assessment according to the criteria mentioned above, independent quality verification, and then official certificate issuance.
Key Stakeholders Involved
- Real estate developers such as Grupo Los Pueblos or Empresas Bern
- Specialized environmental engineering firms (e.g., local consultancies partnering with BREEAM International)
- Architects committed to bioclimatic design
- BREEAM-accredited assessors operating under international license
| Criterion | Main Requirement |
|---|---|
| Energy | Reduced consumption & renewable sources |
| Water | Efficient management & recovery |
| Materials | Sustainability & low environmental impact |
| Health & Well-being | Indoor air quality & comfort |
| Waste | Sorting & recycling |
Positive Environmental Impact
- Significant reduction in overall carbon footprint.
- Notable improvement in thermal and acoustic comfort.
- Increase in urban biodiversity through outdoor landscaping.
- Measurable decrease in energy and water consumption, which helps limit long-term operating costs.
Benefits for Owners and Occupants
- Increased property value thanks to an internationally recognized label.
- Real reduction in annual energy costs.
- Better indoor health quality (filtered air, humidity control).
- Positive image among ESG-conscious investors.
Government Support Planned for 2025
- Direct subsidies for costs related to BREEAM assessment on certain types of new or renovated buildings.
- Partial property tax exemptions for five years after obtaining an internationally recognized green certification (including BREEAM).
- Bonus buildability allowed in certain urban areas if the project achieves a minimum “Very Good” level according to BREEAM.
- Priority in the rapid issuance of administrative permits for certified sustainable constructions.
These measures aim to accelerate the widespread integration of green real estate standards while strengthening the economic attractiveness of the Panamanian real estate sector for international investors.
Good to Know:
BREEAM certification was adopted in Panama as early as the 2010s, marking a turning point toward sustainable construction with pioneering projects like the Via Argentina building in Panama City. Projects must meet strict criteria regarding energy efficiency, environmental impact, and resource management to obtain certification. Leading companies such as Constructora Urbana and Inversiones Bahia are at the heart of this transformative dynamic. BREEAM-certified buildings significantly contribute to reducing carbon emissions, while offering energy savings and increased comfort for occupants. Government incentives, aligned with 2025 standards, include tax reductions and subsidies to encourage developers to adopt these standards. Owners benefit from reduced operating costs, while tenants enjoy a better quality of life thanks to these ecological innovations.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
