India’s biggest nationalised lender the State Bank of India (SBI) decided to provide a loan of $ 1 billion (over ₹6,000 crore) to Adani Mining, Gautam Adani's ambitious $16.5-billion coal mine development project in Australia’s Queensland.
The infrastructure conglomerate, the Adani group, alleged to have close ties with Prime Minister Narendra Modi, has inked a memorandum of understanding which provides for a credit facility of up to $ 1 billion from the SBI for the mine, rail and port project at Carmichael, in Western Queensland, which it aims to build by end-2017.
However, SBI declined to share the details on the deal. According to reports, Adani already has borrowings of close to ₹65,000 crore. The loan offer comes at a time when banks are reporting sluggish loan demand and a rise in bad loans, with many companies, especially infrastructure firms, lining up for debt restructuring.
SBI shares shot up by 5.44 percent the BSE on Monday after the loan announcement, which would be one of the largest extended by an Indian bank for an overseas project.
The MoU with SBI is a significant milestone in the development of our Carmichael mine. It is a unique asset that lies at the heart of our investment in Queensland and Australia, and aligns perfectly with our clear vision for delivering energy security in the Indian marketGautam Adani
The loan was announced as Adani was in Brisbane with a business delegation for the G20 summit, which Modi attended over the weekend.
Adani, has enjoyed a rapid rise in Indian business circles in recent years, a rise often associated with Modi, who had been heading the government in Gujarat where Adani is based and where it has a huge coal-fired power plant, Reuters reports.
SBI is a long-term and highly valued partner of Adani in its home market. It has long been a key financier of the company’s job-creating power, infrastructure and diversified projects in India and abroadAdani
Adani Enterprises already had a long-term borrowing of ₹49,584 crore at the end of March 31, 2014 and short-term borrowings of ₹15,394 crore.
An Australian regional government has agreed to part-fund the infrastructure development part of the project, which has got a new lease of life during Prime Minister Narendra Modi's tour of Australia. Prime Minister Modi met Queensland premier Campbell Newman in Brisbane, leading to a commitment from the Queensland state government to take short-term, minority stakes in Adani Group’s rail and port infrastructure projects.
Earlier, there were reports that the Centre is planning to waive off ₹500 crore green fine for Adani group.