Financing of a project is often based on the owner providing a clear plan and preliminary engineering design, including adequate environmental provisions.

Lending institutions

Financing for reclamation and development projects is critical, especially when they are multi-year projects that require large investments upfront that will not reap economic benefits until after completion.
Worldwide there are many lending institutions, ranging from the World Bank, to more than a half dozen regional development banks. Most of them attach great importance to environmental aspects of development projects.
For reclamation projects as well as port and harbour developments and expansions, the owners and governing authorities, consulting firms, and engineers and other staff need to offer effective and thorough environmental input into the project concept, preparation, detailed engineering, construction and operation.

Environmental aspects

In addition to traditional lending institution requirements, financing without adequate environmental assessments and mitigation measures where necessary, as well as attention to public health and safety, are prerequisites to secure loans.

Equator Principles for emerging markets

Another important development in financing is The Equator Principles, a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. It is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.

The Equator Principles apply globally, to all industry sectors and to four financial products:

  1. Project Finance Advisory Services
  2. Project Finance
  3. Project-Related Corporate Loans and
  4. Bridge Loans.


Since its establishment in 2003, almost 90 international banks have adopted the Equator Principles, including the majority of the world’s leading project lenders. They are known as Equator Principles Financial Institutions (EPFIs) and are present in 37 countries, covering more than 70 percent of international project finance debt in emerging markets. The Equator Principles apply to all new project financings globally with total project capital costs of US$10 million or more, and across all industry sectors.

Public-Private Partnerships

Major dredging operations like reclamation and port infrastructure projects are generally very costly, and can strain the financial capacity of state and local agencies, including quasi-public port authorities with independent bonding and taxing powers.

Public-Private Partnerships (PPPs) are a means to attract the private sector to the development, planning, financing, construction and operation of infrastructure projects. The financing aspect is especially of great interest, because in a Public-Private Partnership the private sector is expected to provide (part of) the capital for an investment. For the duration of the contract, the contractor takes over the construction and/or operating risks in exchange for earnings from the project. The private partner will also assist in maintaining and/or operating the infrastructure in exchange for providing some or all of the financing.

Negotiating this type of financing agreement requires the public and private partners to identify their roles and respective risks. Risks for the public partner include higher port fees necessitated by private financing. Those for the private partner include contractual limits on the adjustments it can make to address cost overruns and revenue shortfalls.


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