Wedoany.com Report-Oct. 14, Swedish green steel company Stegra announced on Monday that it plans to raise up to about 975 million euros ($1.1 billion) in additional financing to support the construction of its steel plant in northern Sweden and strengthen its financial position. The company, previously known as H2 Green Steel, said the new funds will supplement the 6.5 billion euros in financing it secured last year for the Boden facility, which is currently under construction. The plant will use hydrogen produced on-site from renewable electricity as part of its low-emission steel production process.

A general view of Europe's first greenfield steel mill in 50 years, under construction by Stegra, outside Boden, in northern Sweden, December 5, 2024.

CEO Henrik Henriksson stated that the new funding round is intended to cover higher project costs and compensate for state grants the company had anticipated but did not receive. He said: “We already have initial equity commitments from both founders and lead investors.” Henriksson added that the funds would also help reinforce Stegra’s financial stability as the project moves toward completion.

A Stegra spokesperson confirmed that the additional financing will include a mix of equity, debt, and strategic partnerships. The company expects the funding to ensure the project’s completion and support the ramp-up of production volumes. Stegra also said it is in advanced discussions concerning potential outsourcing opportunities that could enhance efficiency and project delivery.

The Boden plant represents one of Europe’s largest industrial projects aimed at producing fossil-free steel. It is designed to rely on hydrogen instead of coal, reducing carbon emissions significantly compared with traditional steelmaking. The project is viewed as an important step in Europe’s industrial decarbonization efforts, supported by Sweden’s abundant access to renewable energy resources.

Sweden has been at the forefront of Europe’s transition toward non-polluting industries, driven by low-cost, carbon-free electricity. However, the green industrial shift has encountered challenges, including high costs and the bankruptcy of some pioneering companies such as battery manufacturer Northvolt. Industries that are difficult to electrify, including steelmaking and long-distance transport, have found that transitioning to low-carbon hydrogen remains expensive and complex.

Despite these challenges, Stegra remains focused on advancing its project as a cornerstone of Europe’s emerging green steel sector. The company aims to demonstrate that large-scale hydrogen-based steel production can be both technically viable and commercially competitive over time.

By raising new capital, Stegra seeks to maintain construction progress and secure long-term operational resilience amid changing market conditions. The company continues to attract interest from strategic investors and industrial partners committed to supporting the development of sustainable materials.

Stegra’s plant in Boden is expected to play a significant role in reducing the carbon footprint of Europe’s steel industry once operational, aligning with Sweden’s broader goals to accelerate clean industrial growth and strengthen its leadership in renewable-based manufacturing.