Home > Banks could accidentally fund Carmichael coal via Adani bond issue

Banks could accidentally fund Carmichael coal via Adani bond issue

8 July 2019

8 July 2019

In early July 2019 Adani issued US$1billion in bonds for one part of its business (Adani Ports and Special Economic Zone), which nine major banks invested in. This company operates several ports in India.

Unfortunately, the evidence shows that the Adani group of companies has regularly funded its expansion through inter-company investments and loans. Money raised in one part of the company is sometimes used to fund the expansion of a completely unrelated part.

This means that banks that have taken part in Adani’s most recent bond issue could easily find their money shifted across to fund the climate-wrecking Carmichael coal mine and rail line. Five of these banks have previously pledged not to fund this destructive project!

Take action

Fill out the form below to contact the eleven banks that coordinated this bond issue and an additional bond issue for Adani Green Energy, demanding they provide concrete reassurances that the money won’t be used to build the disastrous Carmichael mine and rail line in any way.

The banks are:

Barclays*
Bank of America Merrill Lynch
Citigroup,*
Credit Suisse*
DBS*
Deutsche Bank*
Emirates NBD Capital
JP Morgan*
Mizuho
MUFG
Standard Chartered*

*has committed to not funding the Adani Carmichael mine/rail/port project.

Name*
First Last
Email Address*
Phone number
Postcode*
Subject (you can edit this)
Your message to banks that have already ruled out funding Carmichael coal (Barclays, BNP Paribas, Citibank, Credit Suisse, DBS, Deutsche Bank, JP Morgan, Standard Chartered) (you can personalise and amend this, your name will be automatically added at the end)*
I’m extremely concerned about your participation in a recent bond issuance for an Adani group company. I’m writing because I want assurances it won’t enable Adani to build the massive new Carmichael coal mine and rail line - a project you have committed not to fund. After failing to get direct private finance, Adani has announced the company will self-finance the Carmichael coal mine and rail project, requiring $2 billion to develop its first phase. It has said it will use the resources of the Adani Group, suggesting the company may shift capital around the conglomerate, opening up the potential for proceeds from this bond to support the Carmichael coal project. The Adani group of companies has relied heavily on intercompany loans and other forms of cross-investment to finance its expansion over the past five years. A loan or equity injection into one of the Adani group of companies can easily end up financing another part of the company’s operations. Another scenario is that Adani will use the bond capital to pay down debt for one subsidiary, enabling it to borrow for the Carmichael project. You have previously committed to not funding the Carmichael project due to its destructive nature. It is important that this commitment extends to any other forms of financial support to the Adani Group of companies, and any other companies working with Adani on the project. Please note that I consider Abbot Point coal terminal to be a critical part of the Carmichael project, especially as it now has a contract to take Carmichael coal from 2023. The Adani Carmichael project is the focal point of attention for the Australian environmental movement and a large number of the Australian public. In the midst of an urgent climate crisis, the Carmichael coal mine would produce enough coal over its lifetime to emit 4.6 billion tonnes of CO2, equivalent to over eight years of Australia’s annual greenhouse gas emissions. At the local level it is being contested by traditional owners that have not given their consent to the mine and it threatens water supplies and agricultural production. It would also increase industrialisation in the already distressed Great Barrier Reef World Heritage Area. All this has made the Carmichael coal mine arguably the most environmentally and socially contentious project in Australia’s history. A survey in January 2018 found 65% of respondents either opposed or strongly opposed the Carmichael mine. A similar figure was found in the Vote Compass survey of Australians prior to the recent federal election. Please reply within the week to explain how the proceeds of the Adani bond would not be used to finance the Carmichael coal mine and rail project in Australia and won't enable Adani to borrow from other sources to fund Carmichael. Yours sincerely,
Your message to banks and investors that have not yet ruled out funding Carmichael coal (Bank of America Merrill Lynch, CLSA, Emirates NBD Capital, Haitong International, Mizuho, MUFG, Stifel, UBS) (you can personalise and amend this, your name will be automatically added at the end)*
I’m extremely concerned about your participation in a recent bond issuance for an Adani company. I’m writing because I want assurances it won’t enable Adani to build the massive new Carmichael coal mine and rail line (or refinance/repay the Abbot Point coal terminal debt). After failing to get direct private finance, Adani has announced the company will self-finance the Carmichael coal mine and rail project, requiring $2 billion to develop its first phase. It has said it will use the resources of the Adani Group, suggesting the company may shift capital around the conglomerate, opening up the potential for proceeds from this bond to support the Carmichael coal project. The Adani group of companies has relied heavily on intercompany loans and other forms of cross-investment to finance its expansion over the past five years. A loan or equity injection into one of the Adani group of companies can easily end up financing another part of the company’s operations. Another scenario is that Adani will use the bond capital to pay down debt for one subsidiary, enabling it to borrow for the Carmichael project. The Adani Carmichael project is the focal point of attention for the Australian environmental movement and a large number of the Australian public. In the midst of an urgent climate crisis, the Carmichael coal mine would produce enough coal over its lifetime to emit 4.6 billion tonnes of CO2, equivalent to over eight years of Australia’s annual greenhouse gas emissions. At the local level it is being contested by traditional owners that have not given their consent to the mine and it threatens water supplies and agricultural production. It would also increase industrialisation in the already distressed Great Barrier Reef World Heritage Area. All this has made the Carmichael coal mine arguably the most environmentally and socially contentious project in Australia’s history. A survey in January 2018 found 65% of respondents either opposed or strongly opposed the Carmichael mine. A similar figure was found in the Vote Compass survey of Australians prior to the recent federal election. Please reply within the week to explain how the proceeds of the Adani bond/s will not be used to finance the Carmichael coal mine and rail project in Australia and won't enable Adani to borrow from other sources to fund Carmichael. Yours sincerely,
Of course I want to get updates about this campaign from Market Forces!
- Yes
I'd like to volunteer on the campaign to shift finance away from fossil fuels
- Yes