The 27-year-old died after colliding with a dinghy propeller.
The funds will be used for specialty doctors, a CT scan machine and MRI machine.
The veteran lawmaker was appointed in a unanimous decision by 791 delegates at the MDP's congress.
A further downgrade could entail non-humanitarian and non-trade sanctions.
The breakthrough came after weeks of indecision and bickering between the coalition partners.
Nasheed said he was acquiescing to concerns that MDP could be left without a candidate.
Jumhooree Party MP Ali Hussain dismissed speculation that the exiled business tycoon has made a deal with the government.
EU officials took up "the continuing deterioration of democracy in the Maldives."
Faris Maumoon has been jailed for four months and 24 days.
An open hearing in the murder trial of Yameen Rasheed has yet to be held.
Yacht Tours Maldives is owned by Abdulla Jabir, a close advisor to ex-president Mohamed Nasheed.
Two motorbikes crashed into each other in the early hours of Wednesday.
MDP representatives walked out of Tuesday's meeting of the national election advisory committee.
The Adhaalath Party leader was transferred to house arrest as repair work is being carried out on his jail cell.
Mohamed Nasheed and Gasim Ibrahim have both sought asylum overseas. Both have said they want to run for office.
The reduction is based on usage, India says.
Water villas at the resort can cost as much as US$1,500 a night.
