Construction on the dam started in 1976, with funding from the World Bank and the Inter-American Development Bank. Major redesign work was needed to address adjusted seismic criteria for the dam and tunnelling works, following the heavy 1976 earthquake. Additional costs were made to correct engineering errors, and to finance repairs to tunnel damage in the first year of operation, resulting in substantial over-budgeting. From the US$372.7 million calculated costs in 1978, the Chixoy project ended up costing US$944 million.