Knocking down the former US embassy on Avenida Balboa, will make room for a new “modern financial” tower to house government offices.

It will also give the occupants a prime view of the Cinta Costera in an area filled with high end condominiums.

The Panamanian government has announced plans to save an estimated $40 million annually by constructing a new building to house public entities as an alternative to continuing to pay rent.

The Ministry of Economy and Finance (MEF) said that the Government has initiated studies for the construction of a "modern financial tower", defined as a "mega project with first-world attractions" at the former headquarters of the U.S. embassy in Panama City.

The building will house at least seven public entities, as well as private businesses. The old embassy was buuilt in 1938 and moved to a building at the former U.S. military base, Clayton in 2007.

TheMinister of Economy and Finance, Alberto Vallarino, said  that among the first tenants of the new tower will be: Banco Nacional de Panamá, The Banking Superintendenr, The Supeintendent of Insurance, The Tourism Auhority, The Energy secretariat , and the Public Services Authority.

One third of the space will be sold to the private sector to offset the cost of the offices used by the public sector.