Clients no longer turn to Boskalis only for the execution of complex maritime and infrastructure projects. Increasingly, the company is asked to play an important role on the financing side as well. One such example is the Gulhifalhu Phase 2 project in the Maldives where Boskalis has supported its client with the financing process and in meeting international standards on environmental and social management.
Following the completion of the first phase of the land reclamation project on Gulhifalhu in 2020, Boskalis was awarded the contract for the second phase in early 2023. After the award, a lot of preparation immediately went into managing the project’s risk profile before the trailing suction hopper dredgers could get to work. More specifically, the client’s project had to meet the eight environmental and social (E&S) standards set by the International Finance Corporation (IFC) – a part of the World Bank – as a condition for the financing.
“Because we were working with a client with little or no expertise in this domain, Boskalis took on this work itself at the beginning,” Boskalis’ project engineer responsible for the E&S scope explained. “Primarily to get the project off the ground, but also to build up local knowledge so that the client itself can manage the process in the future. Since there are a lot of reclamation projects in the Maldives, this served as capacity-building to ensure that local parties can meet IFC requirements.”
Boskalis has provided the necessary training and support to the client in the Maldives to enable it to respond to critical questions from the banks and credit insurer on environmental and social management.
“During the financing phase we organized more than ten workshops for the client over a period of just a few weeks,” the Boskalis project engineer said. “They needed to acquire the relevant competences and demonstrate to financiers that they had the requisite knowledge and skills.”
An Environmental and Social Impact Assessment (ESIA) – in line with international standards – had to be completed before the dredging project began. Such an assessment considers the potential impact of a project on both the social and natural environment, as well as how any impacts should be prevented or mitigated. On Gulhifalhu, the number of local fisherfolk in the vicinity of the project was established and a detailed understanding was developed as to what extent they might be impacted by it.
“On that basis, the management documentation and procedures were then developed for the project. This was quite a complex process, with a lot of work going into identifying the sources of income for the stakeholders in the locality, and how the Gulhifalhu project could have an impact in that respect,” Boskalis’ project manager on Gulhifalhu said.
The assessment by an independent international consultancy firm concluded that the project does not appear to have a significant impact on the income of the communities in the vicinity of the project – something that will be monitored carefully throughout the operational phase.
One of the project’s financing conditions relates to a biodiversity compensation program which incorporates a coral relocation exercise. This is a similar scope to when Boskalis executed Gulhifalhu Phase 1 and appointed a local party to relocate coral from the project site to a nearby resort. One of Boskalis’ environmental engineers working on the project recalled , how, during 2023, coral colonies were successfully relocated to various nearby resorts.
“The effect on biodiversity was clear to see. Sharks and rays swam past as though it was the most normal thing in the world; our artificial coral colony was an oasis of life. That’s a fantastic result.”
A delegation of independent environmental and social consultants and the financiers themselves have since completed their first audit of the project and the E&S management system put in place by Boskalis has been classified as best practice for the Maldives.
“We are enormously proud of that result and are now going full steam ahead with our work here, both the dredging and the E&S activities,” Boskalis’ project manager said.