Filipino company International Container Terminal Services (ICTSI) has signed a A$398mn (around US$300mn) loan facility for a container terminal project in Melbourne.

The three-tranche facility has been agreed with seven lenders. Citi, KFW Ipex and Standard Chartered acted as mandated lead arrangers (MLAs) and bookrunners, Bank of China, DBS and Investec were MLAs, and Cathay United acted as lead arrangers.

The money was lent to Victoria International Container Terminal (VICT), a fully-owned subsidiary of ICTSI, the largest container and general cargo port in Australia, with a capacity of 2.5 million twenty-foot equivalent units (TEUs).

It will finance the ongoing construction and development of the terminal, phase one of which is set to be ready for operation by the end of 2016.

The tenors were for seven, 10 and 16 years respectively. Finnvera, the export credit agency of Finland, has issued a guarantee for a portion of the debt that will be used to purchase automatic cranes and software solutions from the Finnish Cargotec Group.

The two existing container terminals share a port basin at the mouth of the Yarra River and currently handle about equal shares of Melbourne’s total container trade throughput of 2.6 million TEUs per year. However, their geographical location makes expansion difficult, with the positioning of a turning basin and bridge before the entrance limiting the types of ships that can be received.

The new terminal will face seawards and as such, will bypass these difficulties. The first berth will have three cranes, able to handle post-Panamax ships with loading capacities of 8,000 TEUs.

In a statement, ICTSI says that the deal “continues its streak of successful funding transactions. In addition to deals done at the corporate level every year since 2010, ICTSI secured a major project finance facility last October 2015 when Contecon Manzanillo S.A. de C.V. signed a US$260mn loan for its port development and operations in the Port of Manzanillo, Mexico”.

The company’s director of corporate finance, Manuel Pascua, says: “The VICT deal has pushed the project finance envelope in Australia on a number of aspects, and this has made the process quite challenging. Thanks to the collaborative effort put in together with our lending partners, we achieved a final debt structure that positions VICT for both short and long-term financial strength.”