H2 Green Steel has finalized debt financing agreements totaling €4.2 billion for its groundbreaking green steel plant project. In addition to the previously disclosed equity funding of €2.1 billion, the company has secured an additional €300 million. A €250 million grant from the EU Innovation Fund further boosts the financial backing, bringing the total secured funding for the world’s first large-scale green steel plant in Northern Sweden to nearly €6.5 billion.
Founded in 2020, H2 Green Steel aims to decarbonize challenging industries, starting with the production of steel that boasts up to 95% lower CO2 emissions than traditional methods. The construction of the flagship plant in Boden, featuring integrated green hydrogen and green iron production, is well underway. Contracts for hydrogen, iron, and steel equipment supply are in place. Long-term power purchase agreements cover a significant portion of the required electricity, and half of the initial annual production of 2.5 million tonnes of near-zero steel is already committed through binding customer agreements.
In a significant milestone, H2 Green Steel announces securing €4.2 billion in debt financing, along with an additional €300 million in equity and a €250 million grant from the Innovation Fund, bringing the total funding to €6.5 billion.
H2 Green Steel has secured €3.5 billion in senior debt and an up-to-€600 million junior debt facility. International banks, including Svensk Exportkredit (SEK), the European Investment Bank, BNP Paribas, ING, KfW IPEX-Bank, Societe Generale, and UniCredit, form the group of over 20 lenders. The junior debt consortium is led by AIP Management and comprises European and international investment banks and funds.
New investors, including Microsoft Climate Innovation Fund, Mubea, and Siemens Financial Services, have contributed close to €300 million, bringing the total project equity to €2.1 billion. Existing shareholders, such as IMAS Foundation and Just Climate, are also increasing their investments.
Since its founding in 2020, H2 Green Steel has achieved significant milestones in funding rounds, with the latest announcement marking a historical achievement in the decarbonization efforts for the steel industry.
H2 Green Steel also secured a €250 million grant under the Innovation Fund, supporting innovative projects to hasten the decarbonization of European industries.
“No one has scrutinized our project more thoroughly than those who back our financing. This massive commitment from our lenders, investors, and the Innovation Fund is true recognition of the quality of our company,” says Henrik Henriksson, CEO of H2 Green Steel.
“H2 Green Steel is an excellent example of the kind of breakthrough projects that the EU Innovation Fund is supporting. The EU is proud to support these solutions to decarbonize the European steel industry and keep it competitive in a challenging global environment,” said Kurt Vandeberghe, Director General for Climate Action, European Commission.
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By Ravi Kumar