JICA will provide equipment worth 60.4mn bolivianos (US$8.64mn) to support the initiative, the ministry said in a release.
Three drilling machines, worth 20.1mn bolivianos each, will be used to dig potable water wells. One machine will be placed in Pando, and the other two in Beni.
The departmental governments will provide 20% of the project's total investment, according to water and environment minister Mabel Monje Villa.
"We expect work on the project to begin between June and July of this year; some 130,000 Beni residents and 40,000 Pando residents will benefit from the initiative," added the minister.
The initiative is due to wrap up in 2012.