Final external evaluation of a project (1986-9/930 to upgrade irrigation technology in Honduras. Irrigation systems were constructed on 5,255 ha, and three irrigation districts in Comayagua Valley were rehabilitated, leading to increased production and productivity, mainly in export crops. Export earnings from this project are expected to constitute 4-5% of Honduras' total, and unemployment is expected to drop by 1.5%. However, in some cases, crop yields have been low due to insufficient assistance in on-farm water and fertilizer management. The project provided extensive training in irrigation project design and construction supervision, and most of these services have been privatized. There has been a substantial increase in the capacity of Honduran firms to construct irrigation systems, drill wells, and supply irrigation equipment. The demand for irrigation equipment, especially sprinkler and drip equipment, has also increased substantially. The only shortage is in surface irrigation, where land leveling equipment is scarce. Management of the irrigation districts in the Comayagua Valley has been turned over to water users associations, which, with training, should be able to maintain and manage the districts as soon as these are rehabilitated and equipped for routine maintenance. However, project benefits have not reached a significant number of subsistence farmers, except possibly through better water supply in the Comayagua irrigation districts. Major obstacles are a lack of clear titles and water rights. a national water law, which would guarantee water rights, has been proposed, but it faces considerable political opposition. Land tenure mechanisms for small farmers have not been developed. While private banks are financing new irrigation development, this financing has benefited only large landowners with title to their land. Other concerns include the following. An institutional capacity for interagency coordination in water resource planning is lacking. There is danger of overexploiting Honduras' water resources; the extent of groundwater resources which can be developed in Honduras is not known. Credit availability for future irrigation is limited. The following lessons were learned. (1) Rapid awareness of the benefits of irrigation can be brought about through an extensive irrigation project such as this. (2) Good capability in irrigation design and construction can be developed in a relatively short time through formal training programs (mostly short-term) and extensive hands-on experience. (3) Privatization of irrigation design, construction, and supply industries can be promoted through an extensive project. (4) Credit cannot be made available through the private banking system if farmers do not have titles to their land.