First “green” steel plant secures $7 billion in financing

The developer of the world’s first large-scale plant that will manufacture “green” steel has announced it has secured around $7 billion in financing for the project to date.

H2 Green Steel recently disclosed new debt financing agreements worth $4.6 billion and said that its equity funding had increased by $325 million—up to $2.3 billion. It has also received a grant from a European Union energy innovation initiative worth about $270 million.

H2, founded in Stockholm in 2020, aims to replace the use of fossil fuels in heavy industry with hydrogen fuel produced with renewable electricity, thereby slashing greenhouse gas emissions. The company says its steelmaking process reduces carbon dioxide emissions by up to 95% compared to conventional steel production, which uses blast furnaces fired by coke, a coal-based fuel.

Company officials called the announcement a “massive milestone.” More than 20 lenders signed onto the debt financing, including the European Investment Bank, the Swedish Export Credit Corp., and numerous commercial banks. The new equity funding came from the Microsoft Climate Innovation Fund and Siemens Financial Services, among others.

The debut H2 factory in northern Sweden could begin operations in 2025. The company has signed contracts for hydrogen, iron, and steel equipment, along with agreements for long-term power purchases to supply its electricity. Officials expect to produce 2.75 tons of “near-zero” steel per year initially; about half of that amount has already been sold to customers under binding multiyear agreements.