H2 Green Steel Secures €6.5 Billion for Green Steel Plant

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Synopsis:

H2 Green Steel achieves a monumental milestone in the global push for decarbonization, securing €4.2 billion in debt financing, augmenting equity by €300 million, and receiving a €250 million grant from the EU Innovation Fund. This funding, totaling close to €6.5 billion, propels the company's endeavor to establish the world's first large-scale green steel plant in Northern Sweden, promising a substantial reduction in CO₂ emissions compared to traditional methods.

Article:

In a groundbreaking development, H2 Green Steel catapults itself to the forefront of the green industrial revolution by securing a staggering €6.5 billion in funding. The company, founded in 2020 with a mission to decarbonize hard-to-abate industries, is on track to establish the world's premier large-scale green steel plant in Northern Sweden. This ambitious project aims to produce steel with up to 95% lower CO₂ emissions than conventional coke-fired blast furnaces, marking a pivotal stride in combating climate change.

The secured funds include a definitive debt financing of €4.2 billion, an increased equity infusion of close to €300 million, and a prestigious €250 million grant from the EU Innovation Fund. H2 Green Steel's approach aligns with three sustainability categories: Advantage, Ambition, and Excellence, reflecting varying levels of environmental impact reduction in steel production.

The debt financing comprises €3.5 billion in senior debt and an up-to-€600 million junior debt facility, with international banks providing senior debt under the cover of the Swedish National Debt Office and Euler Hermes as green credit guarantees. Over 20 lenders, including Svensk Exportkredit (SEK), BNP Paribas, and the European Investment Bank, form the formidable consortium backing this green initiative.

Additionally, H2 Green Steel has raised close to €300 million more in equity, bringing the total private placement in the project to €2.1 billion. New stakeholders, including Microsoft Climate Innovation Fund, Mubea, and Siemens Financial Services, join existing investors in supporting this transformative venture.

Henrik Henriksson, CEO of H2 Green Steel, expresses gratitude for the comprehensive scrutiny and commitment from lenders, investors, and the Innovation Fund. He states, "This massive commitment from our lenders, investors, and the Innovation Fund is 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.”

Otto Gernandt, Chief Financial Officer at H2 Green Steel, adds, "We have gone through this process working side-by-side with many different stakeholders. We have worked as one big team, broken new ground, and found innovative solutions in structures and ways of working that are normally rigid. The result is a historical milestone for one of the biggest decarbonization ventures globally.”

Conclusion:

H2 Green Steel's colossal funding achievement propels the company into a pivotal role in the global effort to decarbonize steel production. With €6.5 billion secured for its Northern Sweden plant, the project promises a revolutionary reduction in CO₂ emissions, showcasing the potential of green initiatives in hard-to-abate industries. The collaborative support from lenders, investors, and the EU Innovation Fund underscores the significance of H2 Green Steel's commitment to a sustainable and environmentally friendly future.

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