India’s largest bank hasn’t decided whether to help finance an Australian coal mine following mounting pressure from climate activists and investors, including BlackRock Inc.
Two senior State Bank of India executives, who asked not to be identified, said the bank was dragging its feet on extending part of a funding line of as much as $1 billion to Adani Enterprises.
Which plans to use the money for the controversial Carmichael mine. The bank’s executive committee, which will make the final decision, hasn’t had discussions about the loan this year, the officials said.
The Carmichael mine has been the focus of environmental protests since it was proposed in 2010. SBI shareholders have joined the opposition. BlackRock and Norway’s Store brand ASA raised their objections over the past year, and Amundi SA divested its holdings of SBI’s green bonds because of the bank ties to the Carmichael mine.
SBI drafted an in-principle agreement with Adani in 2014 for a $1 billion facility and brought in several banks from across the world to provide the funding as part of a consortium. The plan has had several iterations since then as the project became more politically controversial. The memorandum of understanding between SBI and Adani for disbursing the loan included several covenants covering environmental clearance, viability of the project and timelines.
While environmental clearance was granted by the Queensland government, the disbursal is subject to meeting other conditions including funding visibility from other lenders, the two officials said.
BY- B. MAKARAJOTHI.