SYDNEY - China Development Bank Financial Leasing Co Ltd and Australia's Fortescue Metals Group have entered into a $473-million agreement to fund the ongoing construction of eight iron ore vessels.

The finance lease facility will fund 85 percent of Fortescue's construction costs over 12 years, the largest direct funding arrangement provided by a major Chinese financier for a non-Chinese company in Australia ,with options for lease extension or early payment.

"This is a ground breaking financing transaction which builds and broadens Fortescue's highly valued relationships with China through our first direct funding arrangement with a major Chinese leasing company," Fortescue chief executive Nev Power said in a statement on Monday.

The world's fourth largest iron ore exporter has been ramping up production while rivals BHP Billiton and Rio Tinto have been scaling back, benefiting from higher spot iron ore prices to pay down debt faster than expected.

The first of eight Very Large Ore Carriers (VLOC) being built at China's Jiangsu Yangzijiang and Guangzhou Shipbuilding International shipyard is expected to be delivered by month end, with remainder through to mid -2018.

Once operational, the fleet will provide 12 percent of Fortescue's shipping requirements while improving load rates, efficiencies and reduce operating costs, the company said.