(Boden / Sweden) – Swedish future steel producer H2 Green Steel AB has announced that it has signed financing agreements totaling approximately €4,2 billion for its steel plant. This sum comprises €3,5 billion in senior loans and a subordinated credit line of up to €600 million.
Consortium of 20 lenders
The group of more than 20 lenders includes Svensk Exportkredit (SEK) and the European Investment Bank, as well as commercial banks led by BNP Paribas, ING, KfW IPEX-Bank, Societe Generale and Unicredit. The subordinated loan syndicate is led by AIP Management and consists of European and international investment banks and funds.
In addition, equity capital was increased by 300 million euros. In total, the equity financing to date amounts to 2,1 billion euros. The new shareholders include Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services. In addition, existing shareholders IMAS Foundation and Just Climate have increased their investments in H2 Green Steel.
250 million euros EU grant
The company also received a grant of 250 million euros from the European Innovation Fund for Climate, Infrastructure and Environment (CINEA). The fund is financed by the European Union's emissions trading system and supports innovative projects that aim to accelerate the decarbonization of European industry.
This means that financing of almost 6,5 billion euros has now been secured for the “first large-scale green steelworks in northern Sweden,” according to the company.
Reduce CO2 emissions by 95 percent
H2 Green Steel was founded in 2020 with the goal of initially producing steel with up to 95 percent lower CO2 emissions than steel made with coke-fired blast furnaces. Construction in soil with integrated production of green hydrogen is “in full swing”.
The supply contracts for the hydrogen, iron and steel equipment are “finalized”. A large portion of the electricity required was secured through long-term power purchase agreements, and half of the initial annual volume of 2,5 million tons of near-zero emissions steel was sold through customer contracts with terms of five to seven years. Steel production is scheduled to begin in 2025. A production volume of five million tons per year is planned from 2030.
“No one has scrutinized our project more thoroughly than those behind our financing,” says Henrik Henriksson, CEO of H2 Green Steel. Their commitment is “a real recognition of the quality of our company”.
The founder and largest shareholder of H2 Green Steel, headquartered in Stockholm, is Vargas Holding, which is also co-founder and one of the largest shareholders of the Swedish battery manufacturer Northvolt.
Photos
Construction is in full swing: H2 Green Steel's steelworks is scheduled to produce green steel from 2025. © H2 Green Steel AB
