H2 Green Steel secures €4.2 billion debt for green steel plant

H2 Green Steel signed definitive agreements for €4.2 billion in project financing and raised total funding to nearly €6.5 billion for the world's first large-scale green steel plant in Boden, Sweden. The financing signals growing investor appetite for near-zero steel, a development relevant as India's steel sector faces decarbonization pressure and potential carbon border measures.

H2 Green Steel signed definitive debt financing agreements worth €4.2 billion and increased its equity raise by €300 million, bringing total equity to €2.1 billion, plus a €250 million EU Innovation Fund grant, for total funding near €6.5 billion. The Boden, Northern Sweden plant integrates green hydrogen and green iron production, targeting up to 95% lower CO2 emissions than coke-fired blast furnaces. Financing comprised €3.5 billion senior debt and up to €600 million junior debt, with Riksgälden and Euler Hermes each guaranteeing €1.2 billion at 80% and 95% coverage.

The lender group of over 20 institutions includes Svensk Exportkredit, the European Investment Bank and commercial banks led by BNP Paribas, ING, KfW IPEX-Bank, Societe Generale and UniCredit. New equity investors include Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services, alongside existing shareholders IMAS Foundation and Just Climate. The development directly affects the global steel industry, a substantial source of industrial emissions, and signals to steel producers, automakers and other heavy buyers that bankable near-zero steel at commercial scale is becoming financeable.

Steel producers and industrial offtakers should monitor H2 Green Steel's execution, with construction well underway, contracts for hydrogen, iron and steel equipment in place, and half of the initial 2.5 million tonne annual output already sold under binding five-to-seven-year agreements. Indian steelmakers facing EU carbon border adjustment exposure should track the cost and bankability of green hydrogen-based production. The EU Innovation Fund grant, financed by the EU Emissions Trading System and administered through CINEA, illustrates the public-finance support underpinning industrial decarbonization.

Key figure — Total funding secured: close to €6.5 billion