H2 Green Steel has successfully secured €4.2 billion ($4.58 billion) in debt financing to fund the construction of its innovative green hydrogen-powered steel plant in northern Sweden. This latest funding brings the total secured funding for the project to nearly €6.5 billion.
The groundbreaking plant will revolutionize the steel industry by significantly reducing carbon dioxide emissions. Compared to traditional blast-furnace technology, the plant will produce steel with up to 95% fewer emissions. This remarkable feat is made possible by replacing coal in the production process with on-site hydrogen generated through electrolysis. The hydrogen will be produced using electricity from renewable sources.
Currently, construction of the plant is well underway, and the company has already secured binding customer agreements for half of the initial annual volumes of 2.5 million tons of steel. These agreements span five to seven years.
In a statement, H2 Green Steel expressed its excitement about achieving this significant milestone on its journey to decarbonize the steel industry. Along with the debt financing, the company has also raised close to €300 million in equity and received a €250 million grant from the Innovation Fund.
The group of lenders supporting H2 Green Steel comprises over 20 institutions, including Svensk Exportkredit (SEK), the European Investment Bank, and commercial banks such as BNP Paribas, ING, KfW IPEX-Bank, Societe Generale, and UniCredit. Additionally, the junior debt consortium is led by AIP Management and includes European and international investment banks and funds. Notable new shareholders include Microsoft Climate Innovation Fund, Mubea, and Siemens Financial Services.
This significant investment paves the way for a greener future in the steel industry. H2 Green Steel’s groundbreaking plant will transform the way steel is produced by drastically reducing carbon dioxide emissions and promoting sustainability.