The Swedish industrial start-up H2 Green Steel has received a further €4.2 billion in debt capital. The company intends to use this to finance the construction of its steel plant in northern Sweden. The plant in Boden is set to go into operation in 2025 as the world's first site to produce steel using green hydrogen from the outset. The company plans to produce the required hydrogen directly on the plant site.
As the Swedish industrial start-up announced on 22 January, it will invest the €4.2 billion in the planned construction of its steel plant, which has been planned since 2021. Up to 2.5 million tons of green steel per year are to be produced here from 2025, whereby the use of hydrogen could save up to 95% of CO2 emissions compared to conventional production routes. In a second phase, the plant's capacity is then set to increase to up to 5 million tons by 2030
The construction of the steel plant, including integrated hydrogen and iron production, is already "in full swing", and the Swedes have also concluded all supply contracts for their hydrogen, iron and steel plants. A large proportion of the electricity required has also already been secured in long-term power purchase agreements.
Several German companies are involved in the project of the start-up, which was founded in 2021: thyssenkrupp Nucera is supplying the electrolysers, while the direct reduction systems come from the SMS Group. Purchase agreements have already been signed with Mercedes-Benz and Porsche, among others. Most recently, the Kirchhoff Group announced the signing of an off-take agreement with a term of seven years.
More than 20 lenders support Swedish industrial start-up
Since its foundation, the company has gone through three rounds of financing and, according to its own information, received €1.8 billion in equity. A further €300 million has now been added, bringing the equity financing to €2.1 billion. In addition to the €4.2 billion in debt capital that has now been acquired, a further €250 million has been raised from the EU Innovation Fund. This brings the total financing of the green steel plant to around € 6.5 billion.
According to H2 Green Steel, the group of more than 20 lenders includes various banks such as Svensk Exportkredit (SEK) and the European Investment Bank. There are also commercial banks such as BNP Paribas, ING, KfW IPEX-Bank, Société Générale and UniCredit. The Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services were also among the shareholders.
In September 2023, H2 Green Steel reported a private placement round with a result of €1.5 billion in equity. It was the largest of 2023 in Europe. Previously, the company had closed its Series A equity round of €86 million in May 2021 and its Series B1 round of €260 million in October 2022.
