Dams that feed the country's hydro-electric plants were low due to the El Nino weather phenomenon, officials said.
"This El Nino has really been the most complicated in the history of Costa Rica," Roberto Quiros, director of the country's ICE electricity institute, told reporters in San Jose.
Rationing will start Monday for an undetermined period.
About 99 percent of Costa Rica's electricity comes from renewable sources -- about three-quarters from hydro-electric plants.
"We have not seen a drought like this in 50 years," said Berny Fallas, a climate expert at the ICE, which is Costa Rica's main energy provider.
On Wednesday, the World Meteorological Organization said in a report that Latin America and the Caribbean had their warmest year on record in 2023, as a "double-whammy" of El Nino and climate change caused major weather calamities.
Much of Central America, it said, experienced intense drought, causing neighbor Panama to limit traffic in its eponymous canal.
The ICE said this will be the Costa Rica's first electricity rationing since 2007, when El Nino also wreaked havoc with water levels.
Hospitals, basic services and industry will not be affected by the cuts, it added.
Further south, Ecuador has recently had to ration electricity due to a shortage of water for hydro-generation, while the capital of Colombia, Bogota, is rationing municipal water.
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