Saudi Arabian Mining Co (Ma'aden) has signed a $5 billion financing deal with commercial banks and a state-owned investment fund to back its $7.5 billion phosphate production project in the kingdom, it said in a statement on Tuesday.

The project in the northern city of Waad al-Shimal is a joint venture between Ma'aden, Saudi Basic Industries Corp and Mosaic and is part of Saudi state efforts to create a stronger industrial base beyond oil refining and export. Phosphate is commonly used in fertilisers.

A total of 16 local and international commercial banks, including Al Rajhi Bank, Bank of Tokyo-Mitsubishi and BNP Paribas, as well as three export credit agencies and the Public Investment Fund (PIF) signed the financing agreement on June 30, the bourse filing said.

The loan agreement will last for 16.5 years and repayments will be made on a semi-annual basis from Dec. 31, 2018.

No split between the commercial bank financing and that from the PIF was given. However, Ma'aden said in April it had secured a $2 billion loan from the PIF to support the Waad al-Shimal project.

The scheme will have a production capacity of 16 million tonnes per year of phosphate concentrate, sulphuric acid, phosphoric acid, as well as plants to produce calcium monophosphate and calcium diphosphate, Ma'aden said previously, with phosphate production expected to start in late 2016.

The rest of the funding is expected to come in the form of equity loans from the project sponsors.

Ma'aden said in May it planned a 5.6 billion riyals ($1.5 billion) rights issue to support its expansion plans, although it didn't specify how much would be used to fund the phosphate scheme. HSBC is advising on the rights issue, as it did on the wider project financing.