Stegra has secured the financing needed to complete its flagship green-steel mill in northern Sweden.
The company, formerly H2 Green Steel, said it landed 1.4 billion euros ($1.65 billion) in capital from a group of new and existing investors led by Sweden’s prominent Wallenberg family. The funding will enable Stegra to finish building and commissioning its novel facility in Boden, just south of the Arctic Circle.
The project is a cornerstone of Europe’s broader ambitions to decarbonize its industrial sector and lead the world on lower-emissions technology. Conventional steel mills rely heavily on coal to produce the ubiquitous metal, making them a major source of planet-warming emissions and harmful air pollution.
Stegra’s first-of-a-kind project will instead rely on green hydrogen, which could slash carbon emissions from steelmaking by up to 95%, compared with traditional coal-based furnaces.
The sprawling facility will use giant electrolyzers, powered by the region’s ample hydro and wind energy supplies, to split water molecules and produce the clean fuel. That hydrogen will then turn raw iron ore into lumps of iron, which will be melted and made into steel in electric arc furnaces, also powered by renewables.
Stegra said it expects to initially produce 2.5 million metric tons of steel annually and eventually double its production of the metal.
The ambitious undertaking has hit some serious snags since construction began in 2022. Stegra previously raised some 6.5 billion euros ($7.64 billion) in loans and equity. But in recent months, faced with rising project costs and delays, the firm had been urgently seeking additional financing to address a growing cash crunch.
In October, the French hydrogen investor Hy24 swooped in to help fund Stegra for an undisclosed amount. That still wasn’t enough to stave off financial troubles for the steelmaker, which has batted away frequent rumors that the company and its marquee steel mill were close to collapsing.
With the new investment from the Wallenberg-led consortium, Stegra says it will now ramp up construction activities following several slower months during its fundraising period. As of last fall, the plant was 60% complete.
The company says the project’s timeline is now “under review,” though Stegra CEO Henrik Henriksson said it will take about 18 to 24 months to start producing steel once the facility is finished, the Sweden Herald reported.
