Astonishing? Violating its own policy, Barclays 'refinanced' Adani Group's $8 billion bonds

A new report released by two global NGOs, BankTrack and the Toxic Bonds Network, has claimed to have come up with “a disquieting truth”: that Barclays, a financial heavyweight with a “controversial” track record, is deeply entrenched in a “disturbing” alliance with “the Indian conglomerate and coal miner Adani Group.”

Believes the report, Barclays has held “the dubious distinction of being the top bond underwriter for the Adani Group in the five years leading up to 2021”, adding, “Even more astonishing is the fact that Barclays underwrote every USD- and Euro-denominated bond issued by Adani Group entities currently active in the market, totalling a staggering $8 billion.”
Accusing Barclays of being “intertwined with the Adani Group's web of deceit, corruption, environmental degradation, and financial toxicity”, titled “Barclays’ Bond With Adani: Why Barclays’ Close Relationship With Adani Is A Huge Risk”, the report cites the Hindenburg Report to say how it sent shockwaves through the financial world, accusing the Adani Group of "brazen accounting fraud, stock manipulation, and money laundering" as the backdrop evidence.
It continues, “The gravity of these allegations was underscored by the OCCRP's damning revelations of Adani's criminal behaviour via insider trading and violation of India's free float laws at the end of August. What's deeply troubling is the unwavering support Adani has received from its loyal banks, including Barclays, Standard Chartered, Deutsche Bank, and Citi, who have not walked away from the corrupt coal company.”
It particularly underlines how the "sustainability credentials" of Adani Green, the Group’s flagship renewable energy arm, have been completely undermined, especially when “a bank like Barclays finances one part of Adani's empire”, thus unwittingly becoming “complicit in the entire web of Adani's dealings.”
Stating that Barclays has breached its own policies, the report says, “Barclays' commitment to responsible banking is now under scrutiny. The bank has a policy that prohibits underwriting bonds issued by major coal companies generating over 30% of their revenues from coal.”
However, the Adani Group’s “over 60% of its revenue comes from coal-related businesses.” Already, it has developed Carmichael, Australia’s biggest coal mine, which has been called “the world’s most insane energy project”, a future stranded asset and a disaster for people, ecology and planet.” This raises questions about “Barclays' compliance with its own coal policy and its commitment to environmental responsibility.”
Pointing out that following the Hindenburg Report and OCCRP, several financial institutions have been distancing themselves from the Adani group, report says, “Danske Bank AM's recent divestment from seven Adani Group companies, including Adani Green, is a clear indicator of the growing unease within the financial sector”. However, as for the Barclays, despite discontent within, Barclays has not acted.
Thus, already there are already indications of a “degree of hesitancy about Adani within Barclays”. In late July, 2023, reports emerged that Barclays is the common denominator in two syndicated loans to the conglomerate, amounting together to more than US$ 1 billion, to refinance debt that the Group became burdened with after the acquisition of the Ambuja cement company last year”.
And yet, “Barclays and other banks baulked at refinancing the loan”, about which “senior executives in London are reportedly wary of further support for Adani.” Not without reason, the group is “desperately clinging to Barclays for support.” This is because “the stakes are high, especially with Adani's current efforts to raise billions in the bond market, including the refinancing of $2 billion in bonds due in 2024.”
The report comments, “For Barclays, this is a moment of truth. The time for complacency has passed. It's time for Barclays to sever ties with Adani, salvage its reputation, and demonstrate a renewed commitment to ethical finance. Barclays and other banks must immediately cease financing for all Adani Group entities, including ruling out future loans to the Group and underwriting its upcoming bond issuances.”
Calling the Adani Green’s “greenness” a myth, the report says, “Subsidiaries like Adani Green Energy have issued green bonds, with use-of-proceeds rules stipulating the bond proceeds will be used solely for environmentally sustainable projects. This allows the subsidiaries access to a lower interest rate. But the poor ring-fencing of these debt instruments may contradict the green bond covenants.”
It warns, “Breaking covenants and potentially even breaching the banks’ own investment criteria exposes banks to legal and fiduciary risks.” In fact, “investors could pursue legal action against Barclays, accusing the bank of misrepresenting the risk of the investments in Adani and failing to complete the due diligence of Adani as a bond issuer.”

The report regrets, “Barclays’ support hasn’t wavered even in the face of the Adani Group’s violations of human rights, rapidly-stranding climate timebombs, business with Myanmar’s criminal junta, plans to mine billions of tons of coal beneath ancestral forests in India, rampant exploitation of its workforce, and alleged financial mismanagement that this year has caused massive fluctuations in its valuation.”
Stating that the Adani Group is already facing setbacks, compelling it to downgrade plans for diversification, the report says, it is focusing instead on its core revenue generators – “namely, the climate-damaging ports and power that fuelled its rise.”

In fact, it is struggling to finance “some of climate-damaging projects that it had previously committed to, such as its plan to acquire a ~US$850mn, 1.2GW coal-fired power plant in Chhattisgarh state, India, from DB power”, which it dropped in the wake of the Hindenburg Report, citing the “volatility period”.
Stating that Adani’s “direct contribution to climate and human rights disasters stands in contradiction to the many initiatives and pledges that these banks have signed up to”, the report points to how “almost all of its bond-facilitating banks are signatories to the Net Zero Banking Alliance (including Barclays, Standard Chartered and Deutsche Bank) and have signed up to the UN Guiding Principles on Business and Human Rights.”
It regrets, since Barclays’ CEO Jes Staley visited India in 2016, the bank has become increasingly associated with the Adani name in the financial world, “dangerously risking its credibility.”
In fact, already, Adani’s relationship banks like Barclays and Standard Chartered are “deepening their support for Adani’s activities and continuing to underwrite its bonds – albeit with reports of internal conflict within Barclays over continuing to support Adani’s toxic practices.”
The report advises Barclays to immediately do the following or otherwise be considered "complicit" in Adani’s allegedly fraudulent business”: Stop providing new finance to all Adani Group entities, including Adani Green, and divest of existing exposures where possible; and stop facilitating new capital market activities, such as bond issuance or sale of shares, for all Adani Group entities.