H2 Green Steel raises €4.75 billion in new financing for Boden project

Sweden’s H2 Green Steel has signed definitive agreements for a €4.2 billion debt financing to fund its green steel project. The company said in a statement.

The startup has also increased the previously announced equity capital raised by €300 million. The new shareholders include Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services. Existing shareholders IMAS Foundation and Just Climate have also increased their investment in H2 Green Steel.

Thomas Ostros, Vice President of the European Investment Bank, a member of the lender group, reminded that the steel industry is a strategic sector, as it underpins the EU economy.

“Our commitment to reach zero emissions by 2050 requires this sector to undergo transformational change. Importantly, the EIB, as the EU climate bank, is supporting H2 Green Steel in its pioneering development of a breakthrough clean technology for the production of low-carbon primary flat-rolled products,” he stressed.

In addition, the startup received a €250 million grant from the EU Innovation Fund. The fund is financed by the EU quota trading system and supports innovative projects aimed at accelerating the decarbonization of European industry and the green transition.

“H2 Green Steel is an excellent example of breakthrough projects supported by the EU Innovation Fund,» Kurt Vandeberghe, Director General of the European Commission’s Directorate-General for Climate Change, said.

The company has now secured financing of around €6.5 billion to build the world’s first large-scale green steel plant in northern Sweden.

Last September, H2 Green Steel announced it had raised €1.5bn in capital, making it the largest private placement round in Europe in 2023. Prior to that, the company closed an €86 million Series A equity round in May 2021 and announced the closing of a €260 million Series B1 round in October 2022.

“No one has vetted our project more thoroughly than those who support our financing. This massive support from our lenders, investors and the Innovation Fund is a true recognition of the quality of our company. It is also a big win for the climate, as we hope this model will inspire funding for other decarbonization initiatives in hard-to-reduce industries,» Henrik Henrikson, CEO of H2 Green Steel, said.

As GMK Center reported earlier, global automotive supplier Kirchhoff Automotive signed a 7-year, €130 million agreement with H2 Green Steel to supply green steel from 2027 onwards to its plants across Europe.