Bangalore: Five state-owned entities have come together to lend about Rs800 crore to Gammon Infrastructure Projects Ltd for setting up a Rs1,228 crore container terminal capable of handling 1.8 million standard containers a year at Union government-owned Mumbai port amid a credit crunch that has roiled global financial markets.

Many Indian companies have already deferred fund-raising plans because of the global credit crisis.

“We have achieved financial closure for the project," said Parvez Umrigar, managing director of Gammon Infrastructure. He declined to give details prior to formally informing the stock exchange.

Financial closure: Five state-owned companies are set to sign agreements with Gammon Infrastructure to execute the rupee loan deal. Ashesh Shah / Mint

Private sector banks did not participate in the funding because they “quoted rates that were too high and also stipulated stiff conditions. For a typical project financing of this nature, all banks that are part of the consortium agree upon common terms. But, some of the private banks that Gammon spoke to initially to join the lending consortium put forth additional conditions exclusively for them," said the same person who named the banks.

A joint venture between Gammon and Spanish port operator Dragados Spl. SA had won the rights in 2007 to develop and operate the container terminal for 30 years at Mumbai port to meet demand for container traffic at Indian ports. Indira Container Terminal Pvt. Ltd, the special purpose vehicle incorporated by the consortium of Gammon and Dragados, had signed a licence agreement with the Mumbai Port Trust to execute the project. The first phase of the new facility with a capacity to handle 1.2 million standard containers a year, is expected to start operations in 2010.

Public works financier Infrastructure Development Finance Co. Ltd, or IDFC, had in September agreed to lend Rs1,000 crore to Gujarat Pipavav Port Ltd (GPPL), the developer and operator of Pipavav port on the western coast. IDFC had also agreed to help GPPL raise a Rs200 crore syndicated loan, the port company said. GPPL will use the money to refinance an existing rupee loan and fund expansion, according to documents that GPPL filed with the market regulator, Securities and Exchange Board of India, for a proposed initial public offering of shares.