Green Hydrogen – Next milestone on the path to climate-neutral steel production: EUR 1.7 billion financing package for Power4Steel successfully secured – SHS
The SHS – Stahl-Holding-Saar Group (SHS Group), together with its subsidiaries Dillinger (Aktien-Gesellschaft der Dillinger Hüttenwerke) and Saarstahl (Saarstahl Aktiengesellschaft), has successfully secured financing for its Power4Steel transformation project – one of Europe’s largest decarbonisation initiatives. The total financing package amounts to approximately EUR 1.7 billion, ensuring full funding for the entire duration of the investment project.
The financing was secured through a consortium of leading national and international banks and combines elements of corporate and investment financing. The investment component is supported by the export credit agencies OeKB (Austria) and SACE (Italy). Additional funding is provided through substantial equity contributions and direct financial support from the German Federal Government and the Saarland Regional Government under the EUR 2.6 billion programme for transforming the Saarland steel industry.
Stefan Rauber, CEO of SHS – Stahl-Holding-Saar and Chairman of the Management Boards of Saarstahl and Dillinger, emphasised:
This marks another key milestone on our path toward a low-carbon future.
“Building on the funding commitments made by the federal and state governments, the placement of orders for the core plant units and the securing of initial green hydrogen supplies, the successful completion of the overall financing package represents another decisive step towards the advancement of this unique project. We are firmly convinced that climate protection, innovation and competitiveness can – and must – advance in tandem. By implementing Power4Steel, we are demonstrating our long-term commitment to Germany as a centre of industrial excellence. Our sincere thanks go to all partners who have accompanied us on this path and supported us throughout the demanding financing process,”
ING acted as Documentation Agent for the transition financing, UniCredit as ECA Coordinator and ECA Agent, and Deutsche Bank as Co-ECA Coordinator as well as Intercreditor, Security & Facility Agent. Lazard supported SHS as financial advisor, Hogan Lovells provided legal counsel to the company and Freshfields advised the banks. We also extend our thanks to Rothschild & Co for providing financial advice and support during an earlier project phase.
Markus Lauer, CEO of SHS – Stahl-Holding-Saar and Chief Financial and Procurement Officer of Dillinger and Saarstahl, explained:
We are grateful to our financing partners, who have demonstrated a clear commitment to supporting industrial decarbonisation in line with their own strategies.
“Through constructive collaboration, we were able to engage both established and new banking partners, all actively supporting the transformation initiative and backing our Power4Steel project.The successful completion of this financing initiative is not only a decisive step for our project and its planned progression – it also demonstrates the extent to which industry, finance and government have aligned. This highlights the shared responsibility to advance the transformation toward climate-neutral steel production. This achievement sends a strong signal for the long-term viability of the Saarland steel industry and underscores the importance of cooperation and innovation within the energy transition,” continues Lauer.
Christian Lattwein, Head of Finance at SHS – Stahl-Holding-Saar, comments:
This financing initiative demonstrates what can be achieved when all stakeholders – industry, banks and public partners – work together toward a common goal: making the decarbonisation of steel production a reality.
“We would sincerely like to thank our partners for their trust and their active contribution to this landmark step.”
As part of the Power4Steel project, a new direct reduction plant and two electric arc furnaces are under construction at the Dillingen and Völklingen production sites. These will gradually replace the existing blast furnaces and converters. Hydrogen-based steelmaking will enable a significant reduction in CO₂ emissions, with levels expected to drop by around 55 % by 2030. Fully climate-neutral production is envisaged by 2045. In the long term, SHS aims to become the largest producer of green steel within its peer group.
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Green Hydrogen – Next milestone on the path to climate-neutral steel production: EUR 1.7 billion financing package for Power4Steel successfully secured – SHS, source
