Magdalena Martinez spent her entire life on the banks of the Indian River, but the proposed dam aimed at protecting the Panama Canal from drought is now threatening to devour her home.

The 49-year-old is one of the residents who oppose the artificial lake that will feed vital trans bias.

"I'm tired of the threat we face," said Martinez, who lives in a wooden house in Boca de Uracillo with her husband and five of her 13 children.

“We don’t know where we are going.”

Martinez's family has been living in a small village surrounded by lush mountains, where locals rely on crops such as cassava and corn and raise livestock for their livelihoods.

The community insists that it will not allow sacrificing its own homes for the benefit of the world's multi-billion dollar global shipping industry.

Last week, hundreds of villagers headed to the Indian River with electric canoes to protest the planned dam that would force thousands of families to relocate.

The Panama Canal Authority (ACP), an autonomous public body that manages waterways, decided to build a reservoir to address the severe drought in 2023, which has resulted in a sharp decline in ship traffic.

The century-old canal connecting the Atlantic and Pacific Oceans relies on previously abundant rainfall stored in two artificial lakes that also provide drinking water.

The canal is primarily used by transport customers in the United States, China and Japan, and operates a locking system to lift and lower the vessels, releasing millions of liters of fresh water each time it passes.

The proposed reservoir spans approximately 4,600 hectares (11,400 acres) and will transport water to one of the existing lakes through a 9km (5.6 mile) tunnel.

“The demand that was determined long ago was met long ago: This is the water of the future,” said Karina Vergara, Environment and Social Manager at ACP.

Work on the reservoir is expected to begin in 2027 and be completed by 2032, with an estimated investment of US$1.6 billion.

Of these, US$400 million was allocated to about 2,500 people from various villages for compensation and relocation.

“We have a strong commitment to dialogue and reach an agreement,” Vilgara said.

If the reservoir is not built, she said, “we will regret it within 15 years.”

Civil society groups warn that the project could eventually affect up to 12,000 people, which is supported by President Jose Raul Mulino as the entire Indian River basin will be affected.

The 80-km long Panama Canal is responsible for 6% of global maritime trade, which is crucial to the Panamanian economy.

This is also at the center of diplomatic disputes, as former U.S. President Donald Trump repeatedly threatened to "take back" the waterways and handed over to Panama in 1999 on the grounds of China's influence.