Green group raises red flag over bank financing for Adani Green Energy

Corporate accountability groups have raised a red flag regarding Adani Green Energy's US dollar-denominated bond being facilitated by 11 banks, arguing that investments in Adani Green Energy amount to investing in the Adani Group’s coal businesses.

The corporate accountability group Eko says its assessment of disclosures by Adani Green Energy has revealed dozens of transactions between the company and other Adani Group firms that are directly engaged in coal expansion. It raised the issue after 11 banks were confirmed as joint bookrunners for the Adani Group’s first USD bond after the Hindenburg accusations created a stir in the business world.

'Supporting coal by stealth'

Three of the 11 banks – DBS, Deutsche Bank, and Barclays – have coal policies which should prevent them from going ahead with the Adani Green Energy transaction because they run the risk of “supporting coal by stealth”, said Eko.

The analysis of the latest financial disclosures carried out by Eko reveal 52 related-party transactions between Adani Green Energy Limited (AGEL) and other Adani Group companies involved in coal or LNG expansion. The transactions include transfers from AGEL to Adani Enterprises which owns the Carmichael coal mine in Australia, to a JV manufacturing drones for the Israeli Defence Force, to Mundra Petrochem which has a coal-to-plastics factory, to Adani Power which has enormous coal capacities, and to Adani Total Gas.

“Barclays, DBS, and Deutsche Bank all have coal policies which prevent underwriting coal bonds in some form. We believe those policies should be applied to this transaction because the Adani Group operates effectively as one single business – and that business’s primary goal is coal expansion," said Nick Haines, Senior Campaign Manager at Eko.

'Like pouring money into a sieve'

“Investing in any Adani company is like pouring money into a sieve – there’s no telling where it will go. By issuing this bond through Adani Green Energy Ltd, Adani is putting its best foot forward with global investors, but nothing has changed since Hindenburg raised the alarm on irregular transactions across the conglomerate,” continued Haines.

Haines also said that Eko and Banktrack, another corporate accountability group, had written to 17 banks that had earlier underwritten Adani bonds urging them not to arrange AGEL’s bond deal and to treat the company as any other subsidiary of the Adani Group, which is the world’s largest private coal developer. He noted that three of these banks, BNP Paribas, Axis Bank, and Mizuho have taken heed and are not participating in this deal.

After revelations by Hindenburg Research in 2023 about suspicious related-party financial transactions within the Adani Group, Norway’s largest pension fund sold its entire holding in AGEL last year over fears that it could be indirectly funding coal.