Deutsche Bank AG has sold a portion of a US$600mil loan being used to finance an Australian coal mine’s acquisition to some private credit funds, according to people familiar with the matter.

The German lender in recent weeks sold about US$120mil – half of its exposure – to Australian and Asian credit funds including Income Asset Management Group Ltd, Regal Funds Management and Keyview Financial Group, said the people, who requested anonymity as the matter is private.

The bank plans to retain its remaining portion of the loan that’s supporting a Golden Energy and Resources-led consortium’s acquisition of the Illawarra coking coal mine in Australia.

It originally held about 40% of the loan, the people said.

The transaction underscores the growing role of private credit funds as an alternative funding source for coal and and other fossil fuel-related projects, which banks are increasingly avoiding due to environmental, social and governance concerns.

The Golden Energy-led consortium signed the US$600mil loan in July with Deutsche Bank and private credit funds, namely Davidson Kempner Capital Management LP, Farallon Capital Management LLC, King Street Capital Management LP, Washington H. Soul Pattinson & Co and Broad Peak Investment Advisers Pte.

The consortium also raised a separate US$150mil working capital loan and a A$150mil guarantee facility.

GEAR M Illawarra Met Coal, the entity acquiring the mine from Australia-based South32 Ltd for US$1.65bil.