SBI (potential) Carmichael loan: Key financing transaction parties

2 minute read

Given a potential Carmichael loan from State Bank of India (SBI), we review who are the main banking transaction parties having exposure to such a - in our opinion - greenwash. MUFG and HSBC come out on top. If SBI proceeds with the loan, it puts remaining parts of previous, outstanding funding transactions (such as issued deals or bilateral lending) into clear risk of funding the new coal mine.

Also, we would advise that in the case the loan is executed, any future SBI bond deals will clearly be helping towards a funding situation for Carmichael. In terms of key transactional enablers of massive coal developments, MUFG (Mitsubishi Financial Group) has been the most supportive banking group for various SBI and Adani related transactions, including the benchmark SBI green bond. From ESG credibility perspective, this indicates that MUFG has the most absolute exposure to SBI potentially lending massive amounts to Carmichael, and the mine actually commencing operations.

HSBC has been the dominant transaction provider out of the more important global financial institutions for SBI specifically. We believe HSBC’s credentials in providing green bond transactions could be at risk if the SBI Carmichael loan goes through and thus making the bank look like it is enabling Carmichael financing solutions.