Green reputation hijacking: how multilateral green credit lines are used for Carmichael purposes

3 minute read

In recent investor communications, State Bank of India (SBI) is leveraging the credibility of multilateral institutions like KfW, the World Bank and EIB to detract from its potential Carmichael coal mine development loan.

We believe those institutions, and KfW in particular (with over USD1bn in credit lines), have a duty to distance themselves from being part of such marketing efforts.

In SBI’s recent investor presentation, there are no references to the investor furore around the Carmichael coal mine development loan. However, the bank is making much of the fact that its strong green credit support comes from multilateral institutions such as KfW, World Bank and EIB.

SBI is simply showcasing such funding lines to detract from the fact that the bank is looking into a financial transaction that is an environmental, economic and governance train-wreck.

We opine that multilaterals in general, but KfW in particular, have a duty to further clarify that they are not condoning SBI’s behaviour in terms of a potential loan to Carmichael, and the usage of their reputations to support any notion that SBI is “ESG”.

However, we do see the potential of SBI as a strong ally for a sustainable transformation of one of the world’s most important areas. That SBI has been dragged into the Carmichael coal story is – in our opinion – part of a domestic political process.

Download pdf (0.4mb)