Water resources management in Nicaragua is carried out by the National water utility and regulated by the Nicaraguan Institute of water. Nicaragua has ample water supplies in rivers, groundwater, lagoons, and significant rainfall. Distribution of rainfall is uneven though with more rain falling on an annual basis in the Caribbean lowlands and much lower amounts falling in the inland areas. Significant water resources management challenges include contaminated surface water from untreated domestic and industrial wastewater, and poor overall management of the available water resources.

The legal framework has historically been fundamentally flawed by a lack of specific water laws and regulations with numerous agencies sharing management duties. There was a 1998 reform aimed a specifying management roles for each of the management institutions and a National Water Law was approved in 2007 that focuses on water resources and regulates water use of different sectors.

Water management challenges Although water covers ten percent of Nicaragua's surface, environmental degradation, pollution, and simple scarcity in some regions threaten the country's ability to provide potable water to sustain its population and productivity. Today, nearly a third of Nicaraguans do not have access to potable water. In rural areas, where 72% of people lack such access, citizens must often procure their water from shallow wells, rivers, streams, and lakes that are polluted with residential sewage, pesticides, and industrial toxins. Although 93% of urban residents can claim to have either legal or illegal water connections, cities are subject to frequent water outages, particularly during the dry season.

Many of the problems in water management were due to the lack of a national water sector and national water law before the passing of such a law in 2007. Lack of technical capacity and inconsistent leadership of water resource management institutions is a significant and ongoing challenge.

Deforestation, with its devastating environmental consequences, is a serious problem. Deforestation accelerates soil erosion, decreases the amount of recharge to aquifers by increasing surface runoff, damages barrier reefs and ecosystems, increases turbidity which affects mangroves, decreases agricultural production, and causes increased maintenance of water infrastructure. Decades of land abuse and environmental neglect exacerbated the devastation of Hurricane Mitch (1998), where deforestation played a major role.

Competing demands The nexus between competing demands such as irrigation, navigation, and hydroelectric potential has created management challenges and conflicts between these sectors. Conflicts with water use are one of barriers whenever a plan for hydroelectric power or construction of an inter-oceanic canal is presented. This point is especially poignant since between 300 and 400 m3/s of the existing river flow is already used to meet the requirements for potable water and irrigation of suitable farmland in the Pacific Region of Nicaragua.

There are of land suitable for irrigation in León-Chinandega plain. However, a proposed plan to irrigate this land would appropriate yet more water from Lake Colcibolca and further reduce its ability to supply enough water for navigation and existing irrigation projects in the surrounding region.

Other aspects to be considered with this idea are the adverse effects on aquatic life of the San Juan River, lakes Managua and Colcibolca, the existing flora and fauna in the area that would be flooded by a proposed dam in the plan, and the environmental impact of the dam construction and all of the other related works. There is a conflict in the use of water for this irrigation project because the more area that is irrigated, the less water that is available for power generation and drinking water supply.

Dispute with Costa Rica over the San Juan River Dating back two hundred years, there have been disputes over the management and usage of the San Juan River forming a border between Nicaragua and Costa Rica. The San Juan River has also long been thought by both countries as offering the promise for another canal route across Central America. This was the case when the Panama Canal site was chosen rather than the San Juan River as the ultimate ship navigation route across the Americas.

The conflict between Nicaragua and Costa Rica continues. The Nicaraguan government announced in August 2009 that it will begin construction at the end of September 2009 to reroute the San Juan River. The head of the committee for development of the San Juan River in Nicaragua said that the $1 million project is intended to "recover the 1,700 cubic meters per second of water that was lost after Costa Rica rerouted it toward its Colorado River between 1945 and 1950."

Costa Rica responded, issuing a statement that said a ruling by an international court "forcefully denies Nicaragua's wish to dredge a new route on the San Juan River." In July 2009, the United Nations’ International Court of Justice (ICJ) unanimously reaffirmed Nicaragua's sovereignty over the river and upheld the ban that does not allow Costa Rican police and military forces to use the river. Nicaragua's exclusive sovereignty over the San Juan River was established in 1858 with the Cañas-Jerez treaty.

According to the 151-year-old Cañas-Jerez treaty, the San Juan River is fully Nicaraguan property. Costa Rica can use the river freely for transport, without any restrictions from its neighbouring country. Costa Rica says Nicaragua is reneging on its obligations by requiring visas and forcing Costa Rican boats to stop for military inspection on the northern bank. All passengers are made to pay a $5 fee and every boat must fly the Nicaraguan flag. Nicaragua also banned commercial fishing by Costa Rican fisherman in retribution of Costa Rica initiating the ICJ suit in 2005.

Water resource base

The wet or rainy season in Nicaragua lasts from May until October, while December through April is dry. Average rainfall in the country is about 80 inches per year. The Pacific region which covers the Pacific rim and portions of the San Juan River receive lower mean rainfall totals ranging between 40 and 60 inches per year.

Groundwater is abundant and the capital city of Managua is completely supplied by subterranean resources including 'lagoons' or water that has infiltrated through Volcano craters. The Atlantic and Caribbean sloping lowlands receive between 100 and 255 inches of rainfall per year making stormwater runoff and flooding a considerable challenge.

Groundwater and Surface water resources The availability of surface water varies markedly from east to west. The eastern Atlantic sloping side has water basins covering 15,000 km2, many flowing rivers and abundant water resources overall. Thirteen major watersheds discharge into the Atlantic from this side accounting for 91% of the land area. By contrast, the Pacific slope on the western side of the country has water basins covering only 4,000 km2, rivers less than 20 km in length and with lower flows. There are eight watersheds that account for 9% of the land area and drain to the Pacific Ocean.

Annual internal renewable water resources stand at 189.7 km3 while also featuring 6.9 km3 of annually shared water from the San Juan River which forms the border with Costa Rica. Because water has been so abundant and demand is low, there are no treaties for joint utilization. The Cañas-Jerez treaty of 1858 however, established Nicaragua's sovereignty over the San Juan River and has sparked conflict between Nicaragua and Costa Rica over many years.

The potential of abundant groundwater is much greater on the Pacific side and relatively lower in the Central and Atlantic regions. On the Pacific side, permeable volcanic soil favors water infiltration and the formation of aquifers or "lagoons" with great output potential. In an average year, 42 km3 of water infiltrates these aquifers, and 16 km3/year can be easily exploited for use.

Major lakes & reservoirs

Nicaragua's wealth of surfacewater is located in the two largest lakes in Central America. Lake Managua or "Xolotlán" is 1,052.9 km2 and is 37.8 meters above sea level and is quite contaminated. The other lake is the very large Lake Nicaragua or Cocibolca and has an area of 8,143.7 km2. Lake Colcibolca occupies the middle section of the tectonic valley shared with two other watersheds: Lake Xolotlán at upper and the San Juan River. This area forms the largest international drainage basin in Central America, with a total area of 41,600 km2, of which 70% or 29,000 km2 are in Nicaraguan territory and 12,600 or 30% in Costa Rica.

Because these two lakes are so big, approximately of water is lost to evaporation each year. Additionally, there are 18 other lakes with nine of those in the Pacific region, another five in the Central region and four in the Atlantic region. There are four reservoirs: three are for hydroelectric purposes and one is for irrigation and fish farming.

Water quality Water quality in Nicaragua was monitored from 1971 to 1986. Due to economics, the monitoring ceased in 1986. Since then, the only information available on water quality is obtained from site-specific studies. It has been recommended that an environmental water monitoring system be established for the purpose of monitoring water quality.

Much of the research and data on water quality in Nicaragua is focused on the health and condition of Lake Colicbolca and the San Juan River. This is due to their importance for Nicaragua in terms of water supply, navigation and transportation, hydroelectric potential, and irrigation. Sedimentation, damaging navigation, and untreated wastewater have transformed Lake Colibolca and the San Juan River into highly contaminated waterways and pose a significant challenge to those making efforts to reverse the pollution.

Agricultural practices such as burning of vegetation and stover in the sloping regions around Lake Colcibolca have resulted in significant sedimentation of the lake. The sediments flowing into the lake are volcanic and become clay when introduced with water forming an impermeable layer of sediment throughout the lake. Navigation on the San Juan River and in Lake Nicaragua are affected by the progressive sedimentation of both water bodies. Navigation is also an important source of pollution of the water resources, due to the fact that boats are washed and serviced in both water bodies.

The waterbodies have therefore become depositaries of hydrocarbon residue, agricultural chemicals, basic grains, and excrement from farm and domesticated animals that are transported on these bodies of water. Untreated municipal and industrial wastewater poses a threat to water quality as well. Most of the population discharges its used water in riverbeds, streams, or directly in the lake with no prior treatment. The quality of water in those bodies of water has noticeably deteriorated.

Water resources management by sector

Water coverage and usage According to statistics from the Food and Agriculture Organization of the United Nations (FAO), national water coverage of potable water was 63% in 2000. Total annual water withdrawals are approximately 248 m3 with 83% of extracted water being used and/or appropriated for agriculture. Non-revenue water losses are also high, whereby more than half of the water is lost due to leaks and broken pipes. Domestic water use is around 14% and the industry sector uses just over 2% of the water.

Irrigation and drainage