Stockholm-based H2 Green Steel, a company that aims to decarbonise the steel industry using green hydrogen, secures over €4.7B in funding to advance its plans for the world’s first large-scale green steel plant in Boden, Sweden.
The total funding for the plant amounts to €6.5B.
H2 Green Steel’s Boden plant will use renewable electricity-produced hydrogen, not coal, for steel production, resulting in a process emitting up to 95 per cent less CO2 than traditional blast furnace methods.
The company also announced the sale of half of the initial annual production, totalling 2.5 million tonnes of steel, through binding five- to seven-year customer agreements.
Investment Overview
H2 Green Steel secured €4.2B in debt financing, raised €300M in additional equity from investors and received a €250M grant from the EU Innovation Fund.
The new debt funding comes from a group of 20 lenders, including BNP Paribas, Societe Generale, ING, KfW IPEX-Bank, the European Investment Bank and Svensk Exportkredit.
Kurt Vandeberghe, Director General for Climate Action, European Commission says, “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 decarbonise the European steel industry and keep it competitive in a challenging global environment. We congratulate the H2 Green Steel team on their dedication and hard work, and look forward to supporting similar initiatives all over Europe.”
Henrik Henriksson, CEO of H2 Green Steel, adds, “No one has scrutinised our project more thoroughly than those who back our financing. This massive commitment from our lenders, investors and the Innovation Fund is a true recognition of the quality of our company.”
“It’s also a big win for the climate as we hope the model will inspire the financing of other decarbonisation initiatives in hard-to-abate industries,” adds Henriksson.
In September 2023, the company secured €1.5B in equity, the largest private placement round in Europe for that year. Before that, it closed Series A at €86M in May 2021 and Series B1 at €260M in October 2022.
Brief about H2 Green Steel
Founded in 2020 by Vargas Holding, H2 Green Steel claims to be at the forefront of green steel production.
The company employs a fully integrated process incorporating end-to-end digitalisation, electricity from fossil-free sources, and green hydrogen as an alternative to coal. Focused on decarbonising industries, it produces steel with up to 95 per cent lower CO2 emissions.
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