Most of this lake is within the province of Guanacaste, and a small part of it is in Alajuela province. Before the 70's, this lake used to be smaller and by that time it was a totally natural lake; nowadays, it has a larger size, since it was modified by the Costa Rican Institute of Electricity to create the most important hydroelectric project in the country.
By the other hand, before this project was made, there was a town called Arenal and located right next to the small lake. These people had to be relocated to another site; they were moved to the north side of the lake. This is known today as Nuevo Arenal.
The original town called Viejo Arenal (Old Arenal) was submerged in the abundant waters of the new lake and most of that old town was destroyed by the construction of the hydroelectric project. A dam of one kilometer was built to accumulate the water of multiple rivers of the zone; as a strategic idea the hydroelectric plants were constructed in the West site of the lake, near the town called Cañas, this is in order to use the water for irrigation systems for the dry areas of Guanacaste.
At the beginning of the project, Arenal Lake produced approximately 50 percent of the energy of the entire country, although today with the emergence of new projects Arenal Lake represents around 20 percent. The total construction of the project took approximately 7 years from 1972 to 1979 and then, it took about one more year to reach the maximum water level.
There are 17 kilometers from La Fortuna downtown to the dam of the Arenal Lake b the route 142 towards the Arenal volcano; it is a single main road. It is also possible to reach the lake from Guanacaste area. It will take approximately 30 kilometers from a town called Cañas by the road 142 to Tilarán. The access routes to the lake are usually in very good condition, it is possible to reach the lake by private car, taxi, bicycle, and there is even a limited public transport service between La Fortuna and Tilarán.