H2 Green Steel signs definitive debt financing agreements for €4.2 billion in project financing and increases the previously announced equity raised by €300 million. Total equity funding to date amounts to €2.1 billion. The company has also been awarded a €250 million grant from the EU Innovation Fund. H2 Green Steel has now secured funding of close to €6.5 billion for the world’s first large-scale green steel plant in Northern Sweden.
Established in 2020, H2 Green Steel aims to address climate impact on a global scale, starting with the decarbonization of challenging industries. The company is committed to producing steel with up to 95% lower CO2 emissions compared to steel produced using coke-fired blast furnaces. Construction is well underway for the flagship green steel plant in Boden, integrating green hydrogen and green iron production. Contracts for hydrogen, iron, and steel equipment supply are in place, and a significant portion of the required electricity has been secured through long-term power purchase agreements. Furthermore, half of the initial annual output of 2.5 million tonnes of near-zero steel has been sold in binding agreements spanning five to seven years.
The recent financial milestones mark a significant achievement in H2 Green Steel’s mission to accelerate the decarbonization of the steel industry, known for its substantial environmental impact. The company secured €3.5 billion in senior debt and an up-to-€600 million junior debt facility. Consistent with project financings, international banks providing the senior debt will be lending in part under cover provided by Riksgälden (Swedish National Debt Office), as a green credit guarantee and Euler Hermes as an export credit cover for €1.2 billion each. The guarantees cover 80% and 95% of the loan amount, respectively, and are provided in accordance with market pricing. The lender group, comprising over 20 institutions, includes Svensk Exportkredit (SEK), the European Investment Bank, and commercial banks led by BNP Paribas, ING, KfW IPEX-Bank, Societe Generale, and UniCredit.
Additionally, H2 Green Steel raised close to €300 million in additional equity, bringing the total private placement to €2.1 billion. New equity investors include Microsoft Climate Innovation Fund, Mubea, and Siemens Financial Services. Existing shareholders like IMAS Foundation and Just Climate are also increasing their investments. The company had previously raised €1.5 billion in equity in September 2023, marking the largest private placement round in Europe for that year. Prior rounds include a series A equity round of €86 million in May 2021 and a series B1 round of €260 million in October 2022.
Furthermore, H2 Green Steel secured a €250 million grant from the EU Innovation Fund through the European Climate, Infrastructure and Environment Executive Agency (CINEA). The Innovation Fund, financed by the European Union’s Emissions Trading System, supports innovative projects aiming to expedite decarbonization in European industries and promote the green transition.
