business
The Green Transition in Northern Sweden: Pressured Company Secures Important Financing
Steel company Stegra has completed its EUR 1.4 billion financing round, which is to enable the completion of the company's green steel plant in Northern Sweden.
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The steel company Stegra has secured EUR 1.4 billion in new financing to complete the construction of the company’s large-scale green steel plant in Boden, Northern Sweden. The company announced this week.
Stegra, formerly known as H2 Green Steel, is currently building a steel plant outside the Northern Swedish town of Boden. There, the company plans to produce nearly fossil-free steel using hydrogen.
Strained finances
In 2021, the company unveiled its green steel venture, steel production using fossil-free techniques in Boden, but in recent years it has struggled with strained finances.
The company had previously secured SEK 75 billion in financing, of which nearly SEK 50 billion was loans. At the same time, due to factors such as inflation and rising construction costs, the company has needed additional financing for the large-scale project, reported among others by Sweden’s SVT.
In April this year, the company announced a new financing round led by a Wallenberg Investments-consortium, consisting of both existing and new investors, such as Bolero and the SEB Foundation.
The important financing of EUR 1.4 billion has now been secured. At the same time, Stegra is announcing several changes to the company's board of directors, with the Swedish, family-owned Wallenberg Investment taking a leading position in the company.
"We are grateful for the support for the work we are doing in bringing near zero emissions steel to the market from both new and existing investors, as well as from lenders. It’s a strong sign of confidence in our business case and the project, says Stegra CEO Henrik Henriksson in the press release.
Henriksson adds that the financing round closes with a stronger and more resilient financial position for the company, and he welcomes the increased Swedish ownership.
"We are pleased that this transaction is now closed. Together with Bolero, IMAS, SEB-Stiftelsen and Temasek, as well as Altor and other new and existing investors, we will now work closely with the Stegra team to complete and commission the plant in Boden," says Håkan Buskhe, Head of Special Investments at Wallenberg Investments and incoming board member of Stegra.
"This large-scale green project represents an important step for Sweden’s competitiveness and the EU’s security of supply," he adds.
The start of production at the steel plant in Boden was most recently postponed until the beginning of 2027. In the press release, the company states that the project timeline is under review, but says it is in a process of ramping up construction activities in Boden.
