Stockholm-based H2 Green Steel, a company that aims to decarbonise the steel industry using green hydrogen, announced that it has raised €1.5B in Europe’s largest private placement of 2023.
H2 Green Steel’s private placement is co-led by new investor Hy24, alongside existing investors Altor, GIC, and Just Climate.
Klas Johansson, co-managing partner of Altor says, “We will significantly increase our engagement in H2 Green Steel in this next important phase when the company is set to build the world’s first large-scale green steel plant.”
“Over Altor’s 20 years, partnering in large industrial transformations has been at our core. H2 Green Steel also fits perfectly next to Altor’s increasingly broad base of investments in the green transition space.”
“We look forward to extending the partnership with management and support on the path to launch operations at the end of 2025,” adds Johansson.
The round also includes new investors Andra AP – fonden and Temasek, as well as continued support from existing investors like AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas, and Wallenberg Investments (FAM).
Capital utilisation
The funds will be allocated to the construction and development of H2 Green Steel’s major green steel plant in Boden, Sweden. Construction preparations began in the summer of 2022, and this deal marks a significant step towards the plant’s expected operational launch by the end of 2025.
Pierre-Etienne Franc, CEO of Hy24 says, “H2 Green Steel Boden is the most advanced large-scale, green industrial project in the world. It is a trailblazer in the decarbonisation of hard-to-abate industrial sectors like steel.”
“The investment by Hy24’s clean hydrogen infrastructure fund will support H2 Green Steel’s ambition to materially reshape steel markets, providing a green alternative to its off-takers and partners. This is part of Hy24’s commitment to help industry get to net zero.”
Revolutionising the steel production
The Boden steel plant by H2 Green Steel is poised to revolutionise steel production by reducing CO2 emissions by up to 95 per cent compared to traditional methods. This is achieved through the on-site production of hydrogen using Europe’s largest electrolyzer and renewable electricity sources, replacing coal.
The plant also integrates advanced technology, digitalisation, circularity, and recycling, making it a pioneering and environmentally friendly steel production facility.
Otto Gernandt, CFO of H2 Green Steel says, “This marks the start of industrial scale decarbonisation of basic materials production. The sector will require substantial investments over the coming decades to enable our customers to produce green end products and, thereby meet their climate targets.”
“We hope this financing will contribute towards accelerating the much needed, broad participation of capital markets in the transformation of hard-to-abate industries,” adds Gernandt.
“Accelerating the decarbonisation of hard-to-abate industries”
H2 Green Steel, launched in 2020 by Vargas Holding, specialises in producing green steel. They utilise an integrated production process that incorporates digitalisation, fossil-free electricity, and green hydrogen as a replacement for coal, aligning with their commitment to sustainable and eco-friendly steel production.
Since its inception, the company has raised over €1.8B in equity across three financing rounds. These include an €86M Series A round in May 2021 and a €260M Series B1 round in October 2022.
On the debt side, the company announced plans for debt financing exceeding €3.5B in 2022 and confirmed its commitment with renewed letters of intent in July 2023. This financial support underscores H2 Green Steel’s mission to advance sustainable steel production.
