Stegra secures $1.7 billion to build world’s first major green-steel plant

Swedish green steel company Stegra has agreed in principle on €1.4 billion ($1.7 billion) in new financing from a combination of new and existing investors to complete the construction of its large-scale green steel plant in Boden, Sweden.

The financing round has been led by Wallenberg Investments, which has formed a consortium of investors that will, through this transaction, take a leading position in Stegra. The consortium consists of Temasek and IMAS. Funding is further strongly supported by Stegra’s existing shareholders, including Altor who will be the second largest owner post-closing, as well as Hy24 and Just Climate.

It is also supported, subject to credit approvals, by its senior and junior lenders. This provides Stegra with a fully funded path to complete the construction and commissioning of its green steel plant.

“This financing reflects the strong conviction in Stegra’s business model among new and existing investors, as well as lenders. It has been achieved in a very challenging macro-environment and reflects significant efforts by everyone involved, including of course investors and banks, but also the team in Stegra and the extended family of suppliers, customers and other close partners in Boden,” says Henrik Henriksson, CEO of Stegra.

“We are convinced of the competitiveness of Stegra and the commercial attractiveness of green steel in addition to the climate benefits, while remaining clear-eyed about the challenges that lie ahead,” said Leif Johansson, Adviser to the consortium led by Wallenberg Investments

The added financing of €1.4 billion will be used to complete the construction of the plant in Boden. This includes previously communicated scope expansions, such as the insourcing of selected infrastructure components, coverage of increased project costs, and the establishment of a prudent financial buffer.

At the completion of the financing round, a higher equity ratio results in a stronger and more resilient financial position for Stegra.

After several slower months during the funding activities, Stegra will now ramp up construction activities. The project timeline is under review.