The Institute for Energy Economics and Financial Analysis (IEEFA) has released a report on the risk of Adani’s Abbot Point Coal Terminal (AAPCT) becoming a standard asset due to insufficient financing.
Adani plans to upgrade Abbot Port to handle increased coal shipments once the mine is up and running.
The project plan also includes the construction of railway line from the Carmichael mine to Abbot Port so coal can be shipped from the mine to India, where Adani says the coal will keep its power stations running.
Currently operating at just over 50 per cent capacity, the AAPCT needs the Carmichael mine to fill the gap created as its current take-or-pay contracts progressively expire.
The report, A house of cards in Australia: Adani’s Abbot Point Coal Terminal Faces Escalating Financial risk said the terminal “runs the risk of becoming a stranded asset if Adani’s proposed Carmichael mine does not get the $1 billion Australian taxpayer subsidy it seeks.”
The IEEFA further said the analysis finds more broadly that “Adani’s entire AUD 3.5 billion debt-funded investment in Australia is at grave risk.”
Tim Buckley, lead author of the report and IEEFA’s director of energy finance studies, Australasia, said, “Securing this refinancing is going to be a real challenge, not the least because the port value has been tied to the success of the Carmichael coal mine proposal which is itself yet to secure funding and which the big four Australian banks have refused to touch,”
The report said, “For the purposes of refinancing Abbot Point, Adani needs to demonstrate that Carmichael will progress in order to convince financiers that (Abbot Point) will be fully utilised into the future.”
