BlackRock and Storebrand lobby Indian bank for coal mining loan
Shareholders of India’s largest bank are worried about a loan plan to Adani Enterprises Ltd. to help finance the opening of the controversial Carmichael coal mine in northern Australia.
Officials from New York-based BlackRock Inc. and Norwegian company Storebrand ASA have contacted the Indian government-owned majority-owned State Bank of India about the loan. Loan value is expected to reach 50 billion rupees ($ 678 million), according to Indian media reports.
The Carmichael mine has been at the center of environmental protesters since it was proposed in 2010, with protests most recently at a November 27 cricket match in Sydney between Australia and India. Adani changed its business name in Australia to Bravus Mining and Resources last month, possibly to help ease controversy over the mine, which is located in the Galilee Basin in the northeastern province of Queensland. The project has become the target of the wrath of climate change activists in the country, which has seen record temperatures and widespread forest fires this year.
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“Financing new coal-fired power plants is clearly not part of a sustainable future,” said Andreas Bjørbak Alnæs, senior advisor on sustainable investments at Storebrand, in an emailed statement.
BlackRock, which owns both Adani and SBI shares, has met with companies linked to the Carmichael project and raised objections because the plan carries ESG risks, according to a person familiar with the matter, who declined to be identified because the conversations are private. In February, BlackRock reprimanded Siemens AG for similar reasons when it signed an 18 million euro ($ 21.8 million) contract to provide rail signaling systems for the mine.
An SBI official, who declined to be identified, questioned the bank’s criticism given that the mine’s license was formally approved by the Queensland government last year. The bank’s press office did not immediately respond to a request for comment on the loan.
“The State Bank of India can certainly see that for both economic and climatic reasons the time to build new massive thermal coal mines is well and truly over,” said Pablo Brait, an activist with the activist group Market Forces. . “India, like Australia, is already grappling with the disastrous effects of climate change and the Adani mega-mine will worsen climate change.
BNP Paribas Asset Management officials met their SBI counterparts on Tuesday, according to stock documents in India. A spokesperson for BNP Paribas declined to disclose details of the meeting.
Amundi Asset Management has said it could sell SBI’s green bonds if the Adani loan goes through. He held around $ 21 million in bonds in his Amundi Planet Emerging Green One fund as of June.
The Queensland government approved a scaled-down plan for the mine in June 2019 after about a decade of challenges from environmental groups. SBI initially offered a memorandum of understanding for a loan to Adani in 2014, then backed down as the project became increasingly politically controversial.