Tegucigalpa, the capital city of Honduras, is located in a central mountainous region having a tropical climate within the Choluteca river basin.

Overcoming these challenges has been difficult for SANAA (Servicio Autonomo Nacional de Acueductos y Alcantarillados), the state-run water and sewerage utility in Tegucigalpa.

In general, people avoid to live on steep hillsides where landslides are of considerable concern or in the river valley where flooding is a constant danger.

[3] On the economic side, structural shifts from agricultural to industrial bases have necessitated movements to an urban setting for much of the population.

Tegucigalpa also struggles with costly inefficiencies across its water resources, stormwater management, sanitation and solid waste services.

A recent World Bank estimate has shown that the total economic cost to the city to exceeds US$60 million per year.

The Choluteca and Guacerique rivers supply water to the Concepción and Laureles reservoirs providing Tegucigalpa with a combined flow of 2 cubic meters per second (m3/s).

The system is predominantly gravity fed with limited pumping to strategically placed elevated tanks to increase water pressure in some areas.

[8] World Bank research indicates that the annual water availability in the natural watershed of Tegucigalpa is 175 (m3/year/inhabitant), concentrated over a six-month rainy season.

Even though SANAA estimates that 70% of the city is connected to the municipal sewer system, the coverage area is very low in outlying neighborhoods and service quality is not good.

Choluteca, Chiquito, and Guacerique rivers are adversely affected by ongoing urbanization of Tegucigalpa, and so by consequence, the Laureles and La Concepción storage reservoirs have become quite contaminated.

(Source: Grant funding request for the Water Partnership Program) The estimated total length of the sewerage system is approximately of 840 km.

[10] Despite the announcement in his inauguration from then, President Manuel Zelaya, that his government would invest 1% of the general budget in the protection of natural resources, water remained absent from that promise.

[11] The June 2009 coup d'etat, whereby the Honduran military removed President Zelaya by force, did not have a severe effect on urban water management in Greater Tegucigalpa.

The 2004 calculated volume of water flowing from the Choluteca, Chiquito, and Guacerique rivers to the Laureles and La Concepción reservoirs was not enough to meet the demand of the more than one million inhabitants living in the capital city.

[12] Local news stories from the past ten years are full of periodic coverage of forced rationing and shortages caused by seasonal drought, weather patterns (i.e.El Nino), and natural disasters (i.e.Hurricane Mitch).

During the dry season from March until May, water levels become very low causing problems of foul odor and elevated concentrations of heavy metals such as iron.

Rivers that run through Tegucigalpa also receive constant discharges of municipal waste and organic material from the surrounding mountains that have been deforested.

Another major concern for SANAA is the lack of proper treatment of domestic sewage that finds its way into the rivers and storage reservoirs of Tegucigalpa.

[15] Geographically located in the mountains with peaks and ridges on all sides, Tegucigalpa is vulnerable to heavy rain storms that can quickly flood the streets throughout the city.

Exacerbating the problem, rapid and informal growth has taken place and has made many of Tegucigalpa's settlements highly vulnerable to environmental degradation and natural disasters.

When coupled with inadequate sanitation and sewerage that discharge into supply rivers and storage reservoirs, the legal framework becomes unreliable in maintaining high water quality standards.

The AMITIGRA foundation designed a payment for environmental service scheme meant to finance activities aiming at conserving land use and water quality.

[3] Another development occurred in February–March 2010, as it became evident that Tegucigalpa was suffering from a significant drought attributable to the El Niño / La Niña phenomenon.