H2 Green Steel, a Stockholm-based steel manufacturer, has secured a substantial €4.2 billion in debt financing.
The debt financing, a notable feat in itself, involves contributions from a consortium of 20 lenders, including prestigious names such as BNP Paribas, Societe Generale, ING, KfW IPEX-Bank, the European Investment Bank, and Svensk Exportkredit. This injection of funds follows a series of successful rounds, with H2 Green Steel having already raised €2.2 billion in equity to date and securing €4.3 billion in debt.
The latest round includes €300 million in fresh equity from key investors, showcasing the continued support and confidence in H2 Green Steel’s vision. Noteworthy contributors to this equity infusion are the Microsoft Climate Innovation Fund, Mubea, Siemens Financial Services, and a €250 million grant from the European Union’s Innovation Fund.
Founded in 2020 by Swedish financiers Harald Mix and Carl-Erik Lagercrantz through their fund Vargas Holding, H2 Green Steel is on a mission to revolutionize steel production. The company’s vision revolves around the construction of a hydrogen-powered steel plant in Boden, northern Sweden, scheduled to be operational from 2025 onwards.
At the heart of this transformative initiative is the commitment to replace coking coal, traditionally used in steel furnaces, with renewable energy and hydrogen. This shift is of paramount importance considering that steel production using coal contributes to approximately 8% of global greenhouse gas emissions, as highlighted by McKinsey. Decarbonizing the steelmaking industry is a complex challenge, and H2 Green Steel’s innovative approach aims to address this environmental concern head-on.
The successful securing of €4.2 billion in debt financing positions H2 Green Steel as a crucial player in advancing the green transition within the steel industry. The funds will significantly contribute to the construction and operationalization of the hydrogen-powered plant, marking a pivotal step toward sustainable steel production practices.
