Bloomberg Business reports of this huge and much needed project here in Panama.

Japan and Panama will sign a memorandum of understanding Thursday to use Japanese technology for an estimated $2 billionmonorail that would span the Central American nation’s trans-oceanic canal and ease traffic congestion.

The pact includes financing via the government-backed Japan Bank for International Cooperation, though lending terms haven’t yet been set, Luis Miguel Hincapie, Panama’s vice minister of foreign affairs, said Thursday in an interview in Tokyo. The project, which could start as early as this year and be completed by 2022, would be the largest Japan-sourced infrastructure investment in Panama’s history, he said.

The 27-kilometer (17-mile) project, Central America’s first monorail, can help expand business ties with Japan, part of a broader goal to draw more investment to Panama, Hincapie said. Japanese industrial group Hitachi Ltd. is “highly interested” in the project and participated in a feasibility study, said spokesman Kazuki Fujiwara. Mitsubishi Corp. is also considering vying for the business, said spokesman Koichi Funabashi.

“This is the start of a new era of cooperation with Japan, and is very important for Panama,” Hincapie said. Panamanian President Juan Carlos Verela plans to visit Japan in April to sign a final agreement on the monorail project, Hincapie said.

The new line would transport commuters from the suburbs of Panama City to the city center in 45 minutes, a trip that now can take three hours by car because of traffic jams.