H2 Green Steel secures EUR 4.75bn for maiden green steel plant

H2 Green Steel has secured EUR 4.75 billion (USD 5.17bn) in fresh financing to support the construction of the world’s first large-scale green steel plant in northern Sweden, which will be equipped with integrated green hydrogen and green iron production.

The total amount includes definitive debt financing agreements for EUR 4.2 billion in project financing and a EUR-300-million increase in a previously announced equity raise. In addition, the company has been awarded a EUR-250-million grant from the EU Innovation Fund, according to a statement released today.

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With the latest deals, H2 Green Steel has now secured nearly EUR 6.5 billion to fund its pioneering green steel plant in Boden where coal in the production process will be replaced with on-site generated green hydrogen. Construction works on the site are already well underway.

The supply contracts for the iron and steel equipment are already in place, as well as for a large portion of the needed electricity. As for the hydrogen, last year, H2 Green Steel inked a contract with Thyssenkrupp Nucera AG & Co KGaA to reserve electrolyser production capacity of 700 MW for the plant in Boden.

The new debt financing includes EUR 3.5 billion in senior and up to EUR 600 million in junior debt facility. It has been provided by a group of over 20 lenders, such as Svensk Exportkredit (SEK), the European Investment Bank (EIB), BNP Paribas, ING, KfW IPEX-Bank, Societe Generale, UniCredit and AIP Management.

As for the equity funding, it has attracted several new shareholders, including Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services. Existing backers, such as IMAS Foundation and Just Climate, have also contributed.

(EUR 1 = USD 1.089)