The San Juan River Basin project area covers some 38,500 km2 in the basin itself, plus its associated coastal zone on the Caribbean Sea. Of the land area, 64% is in southern Nicaragua and 36% in northern Costa Rica. The planning area covers the subbasins of Lake Nicaragua and of the San Juan River, plus four smaller but nevertheless significant subbasins with natural links to this system--the Indio and Maiz river basins in Nicaragua and the Colorado and Tortuguero river basins in Costa Rica.

The waters of the Lake Nicaragua-San Juan River watershed flow through at least eight distinct terrestrial ecosystems: i) dry tropical forest to the east, north, and west of Lake Nicaragua; ii) cloud forest in the high areas of the Central Volcanic Cordillera of Costa Rica; iii) moist tropical forest to the south and southwest of Lake Nicaragua and in the eastern foothills; iv) very moist tropical forest in the San Juan Valley and on the coastal plains; v) gallery forest along river banks; vi) wetlands to the south of Lake Nicaragua and at the confluences of the Colorado and Tortuguero rivers with the San Juan; vii) second-growth forest, meadows, and agricultural land in extensive areas of the basin; and viii) coastal forest and mangrove swamps on the Caribbean coast. The Indio and Maiz river basins are basically covered by moist and very moist tropical forest.

Because of this range of ecosystems and associated habitats, the SJRB has a wealth of biodiversity. Its location in the natural biological corridor running the length of Central America has made it a meeting ground for species from the subarctic areas of North America and others from the subtropics of South America. To a great extent, its natural history is unique. The low population density in many parts of the SJRB has kept it relatively pristine, although there is little information on the potential future impact of human migration trends and the spread of agriculture in the basin.

Regional studies now being carried out by the Central American Committee on Water Resources, with international cooperation, lead to the conclusion that the fresh water in the San Juan Basin is the only source capable of meeting the foreseeable development needs of the semiarid Pacific slope of Central America, the region’s most populated area. Thus, there is every likelihood that this system will come under increasing pressure of human exploitation. In addition, because the SJRB is also a common westward passageway for anticyclones from the Atlantic to the Pacific, the threat of hurricanes and tropical storms, on top of the threats posed by volcanic activity and seismic pressures that already make this fresh water supply specially vulnerable, further exacerbates the human pressures likely to be experienced within this hydrologic system.

Although not included in the project area, Lake Managua at times has been temporarily connected with the SJRB and thus will be taken into consideration during the formulation of the SAP for the basin. For example, the torrential rainfall associated with Hurricane Mitch in October 1998 caused Lake Managua to overflow its banks, flooding the surrounding areas and sending water into Lake Nicaragua. To prevent such flooding in the future, the Government of Nicaragua now intends to regulate the waters of Lake Managua, which will make transfers to Lake Nicaragua more frequent. Various studies, in particular those undertaken by the Inter-American Development Bank (IDB) and the German Technical Cooperation Agency (GTZ), have shown that Lake Managua is extremely polluted. Thus Lake Nicaragua faces the threat of an influx of heavy metals, agrochemical waste associated with pesticides and fertilizers, and industrial and urban effluents, all of which would diminish the quality of its waters. With this in mind, the SJRB project will work in close coordination with any initiatives or plans to regulate the level of Lake Managua. Close co-operation with the UNEP/GEF project "Reducing Pesticide Runoff to the Caribbean" executed by the office of the Regional Seas Programme for the Caribbean (CAR-RCU) is anticipated.

Currently, the two countries lack adequate technical and institutional capacity to collect comprehensive data on the SJRB and to implement the efficient policies for watershed planning and integrated management that are needed to protect and rehabilitate water resources and ecosystems. Paucity of resources, poor transportation infrastructure, the lack of attention to women in natural resource management, and weak local institutions are common on both sides of the border. Given this situation, the governments of Costa Rica and Nicaragua have proposed a joint approach to best manage this complex hydrologic system, within the constraints imposed by demography and geography.

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