By SAT News Desk
Melbourne, March 14 2015 – Adani’s controversial Australian Carmichael coal mine looks to be in jeopardy following reports that the State Bank of India (SBI) is preparing to decide against giving the company a planned $1 billion loan for the project due to concerns over its financial viability. The loan deal was signed during last year’s Australian visit of Indian Prime Minister Narendra Modi and was criticised as a loan to a company whose head is considered close to Mr. Modi.
A Reuter report’ “SBI to turn down Adani’s $1 billion Australian loan request – sources” (March 2014) says, “State Bank of India is preparing to turn down a $1 billion loan request from Adani Enterprises intended for a coal project in Australia, scrapping an agreement signed last year, sources with direct knowledge of the move said.
The sources said India’s largest bank had not yet given Adani officials notice of the internal ruling, but they said the decision was now due to be communicated to the group.”
The story further says, “SBI, which like all Indian state banks is under pressure to reduce its bad debts, said at the time that the signed deal was simply a memorandum of understanding. It would, it said, complete proper due diligence and a project appraisal before giving out any cash.”
Reacting to the news, Greenpeace Climate and Energy Campaigner, Nikola Casule, said:
“State Bank of India analysts seem to have realised that this project has no future. The wider financial community has long ago recognised that the project is on shaky financial ground. It is now up to the State Bank of India to make the right decision and refuse to fund Adani’s gamble with the hard earned money of Indian taxpayers.
“We already know that Adani’s coal project represents a serious threat to the Great Barrier Reef. Today’s news emphasises that it is an investment black hole as well.”
Adani has struggled to secure project financing for its $16.5 billion coal mine, rail and port expansion. Major global banks, including HSBC, Deutsche Bank and Goldman Sachs, have already refused to fund the project due to its damaging impact on the Great Barrier Reef, currently under consideration by World Heritage Body UNESCO for inclusion on its ‘in danger’ list.
“Banks all over the world are saying no to Adani. Even analysts from Australia’s ANZ bank are saying the project is not viable. No bank should be financing the Reef’s destruction,” Casule added.
– SAT News Service.
