UCG Unicredit Spa

By Dominic Chopping

STOCKHOLM--H2 Green Steel has raised 4.2 billion euros ($4.58 billion) in debt financing to build its green hydrogen-powered steel plant in northern Sweden, bringing its total secured funding for the project to nearly EUR6.5 billion, it said Monday.

The company's plant will deliver steel with up to 95% less carbon-dioxide emissions compared to steel produced with traditional blast-furnace technology, made possible by replacing coal in the production process with hydrogen produced on-site with an electrolyzer, using electricity from renewable sources.

Construction of the plant is well under way and half of the initial annual volumes of 2.5 million tons of steel have been sold in binding five- to seven-year customer agreements, it said.

"Today H2 Green Steel announces a massive milestone on its journey to accelerate the decarbonization of the steel industry," the company said in a statement.

"The company has signed debt financing of EUR4.2 billion, added equity of close to EUR300 million and been awarded a EUR250 million grant from the Innovation Fund."

The group of over 20 lenders includes Svensk Exportkredit (SEK) and the European Investment Bank together with commercial banks, led by BNP Paribas, ING, KfW IPEX-Bank, Societe Generale and UniCredit.

The junior debt consortium is led by AIP Management and comprises European and international investment banks and funds. New shareholders include Microsoft Climate Innovation Fund, Mubea and Siemens Financial Services.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

January 22, 2024 06:20 ET (11:20 GMT)

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