We think that AdaniConneX will to a fraction be driven by electricity generated from Carmichael coal and we base this on the following three assumptions. Firstly, AdaniConneX will be powered using non-renewable sources. The AdaniConneX JV statement clearly states that some of the power for the data centres will come from non-renewable sources. Secondly, the non-renewable electricity will be supplied by Adani Power. The JV signing ceremony focused around Adani Power’s CEO. Adani Power’s generation capacity is 99.7% coal based. Thirdly, Adani Power will use Carmichael coal to generate electricity.
Adani Enterprises’ Carmichael mine has been described by Adani Group’s COO as a “support function for Adani Power” clearly indicating that Adani Power will produce electricity based on Carmichael coal. From a balance sheet perspective, AdaniConneX provides a secured forward revenue stream for Adani Enterprises on a company level and for Carmichael on a project level. Providing balance sheet relief is, in our credit experience, effectively the same as lending cash.