Adani says finance not an issue for Australia projects

The Adani Group has said there is no issue with financing of the Australian Carmichael coal mine and Abbott Point Port expansion, following statements from major US and European banks committing themselves against funding the project, which is on the coast of the Great Barrier Reef, a world heritage site.

A senior Adani Group official told Financial Chronicle on the condition of anonymity that arranging funds for the project would not be an issue, once it is cleared by the Queensland court, as the Australian government has already approved the project.

“Australian Banks and Indian banks can still fund the project. The problem is only with foreign banks operating out of Australia,” the official said.

Separately, Adani Group’s Australia office issued a statement stating, it has not requested these banks formally to fund the project, hence it would not have any bearing on the project. “An institution ruling out something it was not requested to do have no bearing on the company. Adani’s projects in Queensland comply with the strictest environmental conditions in the world’s best practised environmental approvals framework. The company continues to progress the financing arrangements for its projects in Australia,” the statement said.

Eleven global banks, which majorly lend to the coal sector across the world and in Australia, have said they will not fund the project on ethical and social grounds. They include Deutsche Bank, HSBC, Barclays, Royal Bank of Scotland, Morgan Stanley, JP Morgan Chase, Goldmans Sachs, Citi, Credit Agricole, BNP Paribas and Societe Generale.

According to Market Forces, an affiliate project of Friends of the Earth Australia and a member of the BankTrack international network that campaigns against environment issues across the world, said: “For 11 of the world’s ‘go-to’ banks for coal finance to now be out of the picture means the options available to Adani for the billions of dollars of debt it will need are severely limited. Banks that remain potential targets for Adani will need to contemplate not just environmental and economic risks of building new massive coal mines and export terminals in the Great Barrier Reef world heritage area, but the reputational risk now that so many of their peers in the banking sector have publicly said no on environmental grounds,” Market Forces said in a note.

Adanis are believed to be in discussion with Standard Chartered Bank and some other lenders, which they declined to name.