One of Europe’s most closely watched climate infrastructure startups, Stockholm-based steel maker H2 Green Steel, has secured €4.2bn in debt financing. The company, which is building a hydrogen-powered steel plant in northern Sweden, has now raised €6.5bn in debt and equity financing.
The new debt financing comes from a group of 20 lenders, including BNP Paribas, Societe Generale, ING, KfW IPEX-Bank, the European Investment Bank and Svensk Exportkredit.
H2 Green Steel has also raised €300m in fresh equity from investors including Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services, and a €250m grant from the European Union's Innovation Fund.
In 2022, the company announced it had “support” for billions of euros of debt financing. That is now confirmed, and the €4.2bn figure is higher than the €3.5bn it said it expected to secure in 2022.
H2 Green Steel has now raised €2.2bn in equity to date and €4.3bn in debt. Last year, it announced a €1.5bn equity raise; the largest round in Europe in 2023. Investors include Al Gore’s Just Climate Fund, GIC and Temasek.
H2 Green Steel was founded in 2020 by Swedish financier Harald Mix and business executive Carl-Erik Lagercrantz through their fund Vargas Holding. The two were also involved in the launch of Northvolt, another of Europe’s leading climate tech companies.
It’s currently building a plant in Boden, northern Sweden, which will use green hydrogen from 2025 onwards.
It will replace coking coal — which is used in furnaces to produce steel — with renewable energy and hydrogen. Steel production using coal accounts for around 8% of global greenhouse gas emissions, according to McKinsey, while steelmaking as an industry is proving especially challenging to decarbonise.