The historical Chagres River Basin, which serves as the basin for the Panama Canal, extends some 3,260 kilometers in length and is not only the most important river basin in Panama but also one of the most strategic river basins in the world. Its two major lakes — Gatún and Alhajuela — function as reservoirs for the water needed to operate the inter-oceanic canal as well as to supply the water requirements of both Panamá City and Colón, urban concentrations that contain more than half the country's population.
Gatún Lake was created in 1913, when the Chagres River was closed off at its Atlantic outlet, while the Alhajuela was created in 1934 by damming up the Madden River in the high, mountainous part of the country.