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Adani's $1 billion loan still pending as SBI gets cold feet

Business

Adani Australia is still waiting for India’s largest bank to approve a $US1 billion loan amid investor pressure over the Carmichael coal project in central Queensland.

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Reports out of India claimed two senior executives at the State Bank of India said the bank was delaying a decision on the loan.

The proposed loan from the bank, which is majority-owned by the Indian Government, had first suggested in the early days of the Carmichael project being built by the renamed Bravus, but fell foul of environmental pressure.

London-based reinsurer MS Amlin also announced it would not provide coverage for the project. It was the ninth out of the 10 biggest Lloyd’s of London insurers to publicly state that it would not provide coverage to Adani’s coal project, making Tokio Marine the last of the top 10 insurers yet to rule out coverage.

There was an in-principle agreement with Adani in 2014 for a $US1 billion facility but never went any further.

The Indian Government, through its Prime Minister Norendra Modi has close ties to Adani and its chairman Gautum Adani.

Now investors such as BlackRock and Norway’s Storebrand ASA are adding to the pressure.

Some of the reluctance from the bank has apparently come from its relatively new chairman Dinesh Kumar Khara.

Even so, Adani managed to find funding for the development and the Carmichael project remains on track to deliver its first coal some time this year, despite ongoing protests against the project.

An Adani spokesperson said the specific details of the funding arrangements were commercial in confidence and the Carmichael mine and rail project was fully funded to completion from group funds.

“Construction of the Carmichael mine and rail project is well underway and we are on track to export first coal in this year,” the spokesperson said.

About 2600 people had been employed by the project which had advanced to the point where several million cubic meters of soil that sat on top of the coal seams had been removed and track laying on the rail line was also progressing quickly.

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