Illustration of the steel plant to be built in Boden, Northern Sweden. (Illustration: H2 Green Steel), Image used for illustrative purpose only.
6 minutes read

H2 Green Steel raises more than €4 billion for the world’s first large-scale green steel plant

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.

H2 Green Steel is driving one of the largest climate impact initiatives globally. The company was founded in 2020 with the purpose to decarbonize hard-to-abate industries, starting by producing steel with up to 95% lower CO2 emissions than steel made with coke-fired blast furnaces. The construction of the flagship green steel plant in Boden, with integrated green hydrogen and green iron production, is well under way. The supply contracts for the hydrogen-, iron- and steel equipment are in place. 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.

Today H2 Green Steel announces a massive milestone on its journey to accelerate the decarbonization of the steel industry, which is still one of the world’s dirtiest. The company has signed debt financing of €4.2 billion, added equity of close to €300 million and been awarded a €250 million grant from the Innovation Fund. Funding amounts to €6.5 billion in total.

H2 Green Steel has signed definitive financing documentation for €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 group of over 20 lenders includes Svensk Exportkredit (SEK) and the European Investment Bank together with commercial banks, led by BNP Paribas, ING, KfW IPEX-Bank, Societe Generale and UniCredit.
  • The junior debt consortium is led by AIP Management and comprises European and international investment banks and funds.

H2 Green Steel has also raised close to €300 million more in equity, bringing the private placement in the project to a total of €2.1 billion. New shareholders include Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services. Additionally, IMAS Foundation and Just Climate are some of the existing shareholders which are increasing their investments in H2 Green Steel.

In September 2023, H2 Green Steel announced it had raised €1.5 billion in equity, making it the largest private placement round in 2023 in Europe. Before that, the company closed its series A equity round of €86 million in May 2021 and announced the close of its series B1 round of €260 million in October 2022.

H2 Green Steel has also signed a €250 million grant agreement under the Innovation Fund through the European Climate, Infrastructure and Environment Executive Agency (CINEA). The Innovation Fund is financed by the European Union’s Emissions Trading System and supports innovative projects that aim to speed up decarbonization of European industry and accelerate the green transition.

“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 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 Henrik Henriksson, CEO of H2 Green Steel.

“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,” Otto Gernandt, Chief Financial Officer, H2 Green Steel.

“H2 Green Steel is an excellent example of the kind of breakthrough projects that the EU Innovation Fund is supporting. 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.


“It has been a both long and exciting journey working side-by-side with H2 Green Steel as well as national and international stakeholders. Together we have now accomplished a very important milestone in the future decarbonization of the hard-to-abate industries. Along the way, we have broken new ground, built some fantastic relationships and we look forward to continuing to do our bit to support the climate transition”, says Magnus Montan, CEO SEK.

“We are extremely proud that we have been able to play a part in this landmark transaction. As German ECA we have a strong focus on supporting the German industry in the energy transition and this project shows that German companies such as SMS and TK Nucera can provide the leading-edge technology that is key to drive the transition to decarbonization of relevant industries like the steel sector. Huge congratulations to everybody at H2 Green Steel for their fantastic work in bringing this adventure to reality,” said Ulrich Schulte Lünzum, Head of Project Finance, Euler Hermes.

“The steel industry is a strategic sector, being at the heart of the EU economy. Our commitment to reach net zero by 2050 requires this sector to undergo transformative changes. It is important that the EIB, as the EU climate bank, is supporting H2 Green Steel in its pioneering development for a breakthrough clean technology to produce low carbon primary flat steel products. The project paves the way for the development of environmentally friendly steel – crucial for the decarbonisation efforts of the so-called “hard to abate sectors”, of which steel is an important one,” says Vice-President of the European Investment Bank, Thomas Östros.

“Working closely with the exceptional H2 Green Steel team since the inception of the project in 2021, we are extremely proud to have supported the venture in this precedent setting financing. This transaction illustrates very well how industrial innovation can be financed to enable transition. A huge milestone for the European low carbon steel industry,” said Christophe Hadjal, Managing Director, Regional Head for Europe Mining, Metals and Industries Finance, Societe Generale

“Use of green hydrogen as the reducing agent for iron ore in the steel-making process is one of the highest merit order use cases for green hydrogen we have identified. It has been quite a journey over the past two-and-a-half years, and we look forward to continuing to work with the H2 Green Steel team on the Boden project and beyond.” said Greg Falzon, Partner, Co-head of investments at AIP.

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