The steel company H2 Green Steel has secured debt financing of SEK 48 billion for what could be the world's first large-scale green steel plant in Boden, Northern Sweden.
The steel company H2 Green Steel has signed debt financing agreements for SEK 48 billion in so-called project financing. That is disclosed in a press release.
The company has also raised close to SEK 3,4 billion more in equity, bringing the private placement in the project to a total of SEK 24 billion.
In addition, the EU Innovation Fund has awarded H2 Green Steel around SEK 3 billion.
With this, H2 Green Steel has now secured funding of close to SEK 75 billion – for what could be the world's first large-scale green steel plant, which is under construction in Boden, Northern Sweden.
"No one has scrutinized 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 decarbonization initiatives in hard-to-abate industries," says CEO Henrik Henriksson in a press release.
Decarbonization of the steel industry
"[The financing] is also a big win for the climate as we hope the model will inspire the financing of other decarbonization initiatives in hard-to-abate industries," Henriksson adds.
The steel industry is currently responsible for about ten percent of Sweden's carbon dioxide emissions, and other companies in Northern Sweden are also venturing big to adapt their business to fossil-free iron and steel production.
H2 Green Steel writes that they will start producing steel with up to 95% lower CO2 emissions than steel made with coke-fired blast furnaces.
"H2 Green Steel is an excellent example of the kind of breakthrough projects the EU Innovation Fund supports. The EU is proud to support these solutions to decarbonize 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," said Kurt Vandeberghe, Director General for Climate Action, European Commission.
Significant power supply secured
According to the company, construction of the green flagship steel plant in Boden is well underway.
The press release also states that a large portion of the electricity needed has been secured in long-term power purchase agreements, and half of the initial yearly volumes of 2.5 million tonnes of near-zero steel have been sold in binding five- to seven-year customer agreements.