Seeking economic growth and job creation to tackle the nation's extreme poverty, the Nicaraguan government awarded a concession to build an interoceanic canal and associated projects to a recently formed Hong Kong based company with no track record or related expertise. This concession was awarded without a bidding process and in advance of any feasibility, socio-economic or environmental impact assessments; construction has begun without this information. The 278 km long interoceanic canal project may result in significant environmental and social impairments. Of particular concern are damage to Lake Cocibolca, a unique freshwater tropical lake and Central America's main freshwater reservoir; damage to regional biodiversity and ecosystems; and socio-economic impacts. Concerned about the possibly irreparable damage to the environment and to native communities, conservationists and the scientific community at large are urging the Nicaraguan government to devise and reveal an action plan to address and mitigate the possible negative repercussions of this interoceanic canal and associated projects. Critical research needs for preparation of a comprehensive benefit-cost analysis for this megaproject are presented.

The proposed interoceanic canal will connect the Caribbean Sea with the Pacific Ocean, traversing Lake Nicaragua, the major freshwater reservoir in Central America. If completed, the canal would be the largest infrastructure-related excavation project on Earth. In November 2015, the Nicaraguan government approved an environmental and social impact assessment (ESIA) for the canal. A group of international experts participated in a workshop organized by the Academy of Sciences of Nicaragua to review this ESIA. The group concluded that the ESIA does not meet international standards; essential information is lacking regarding the potential impacts on the lake, freshwater and marine environments, and biodiversity. The ESIA presents an inadequate assessment of natural hazards and socioeconomic disruptions. The panel recommends that work on the canal project be suspended until an appropriate ESIA is completed. The project should be resumed only if it is demonstrated to be economically feasible, environmentally acceptable, and socially beneficial.