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May 6, 2024

Adani’s Dhamra LNG Seeks $600 Million Loan to Boost Gas Operations

Adani’s Dhamra LNG Terminal Pvt., a subsidiary of Adani Total Pvt., is in talks with several banks to secure an offshore loan worth approximately $600 million. The loan is intended to refinance existing debt, according to sources familiar with the matter.

The borrowing, with a tenor ranging from three to five years, is likely to be priced in connection with the Secured Overnight Financing Rate. Lenders engaged in discussions for this transaction include Credit Agricole, DBS Bank Ltd., BNP Paribas, Mitsubishi UFJ Financial Group Inc., and Mizuho Bank Ltd. The conglomerate, led by billionaire Gautam Adani, aims to finalize the loan within the next two months.

Adani Group has not responded immediately to Bloomberg’s requests for comment. However, the conglomerate has been steadily regaining investor confidence since facing scrutiny from US short seller Hindenburg Research early last year. In March, the group witnessed strong demand for its inaugural public bond sale following the short seller crisis.

Adani Total, a joint venture between Adani and TotalEnergies, is strategically positioned in the context of Prime Minister Narendra Modi’s government initiatives. The government aims to bolster India’s LNG import capacity to elevate the share of natural gas in the country’s energy mix to 15 percent by 2030, up from the current 7 percent. This move aligns with efforts to reduce reliance on more polluting fossil fuels like coal and oil.

The loan sought by Dhamra LNG underscores Adani’s commitment to expanding its presence in the natural gas sector. Adani Total’s strategic partnership with TotalEnergies, combined with India’s push for cleaner energy sources, presents significant growth opportunities for the conglomerate. By securing this loan, Adani aims to fortify its position in the LNG market while contributing to India’s energy transition objectives.

Investment in LNG infrastructure is crucial for India’s energy security and environmental sustainability. Adani’s efforts to secure financing for its gas operations demonstrate a long-term commitment to aligning with national energy goals and driving economic growth through sustainable means.

In conclusion, Adani’s pursuit of a $600 million loan for its Dhamra LNG unit reflects the conglomerate’s strategic vision to advance its gas operations and support India’s transition to cleaner energy sources. With strong government backing and investor confidence, Adani is poised to play a pivotal role in shaping India’s energy landscape for the future.

Jhumpa Lahiri

Jhumpa Lahiri

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