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Facing a funding gap of over $1 billion, Stegra (formerly H2 Green Steel), a flagship European green steel project in Sweden, recently secured investment support from the French hydrogen fund Hy24, giving the project a new lease on life.
Located south of the Arctic Circle in northern Sweden, the project is currently about 60% complete. B27R085 oriented electrical steel, Upon completion, it will become the world's first large-scale commercial steel plant to use clean hydrogen to reduce iron ore and achieve zero-carbon steel production, and is considered a crucial element in Europe's efforts to lead the US and China in the field of green steel.
Hy24 CEO Pierre-Etienne Franc said: "The project's fundamentals are very solid, and demand for green steel has increased significantly since its launch."
Stegra announced on October 13th the launch of a new round of financing, aiming to raise approximately 15% of the total project funding, with sources including:
The company has secured new equity and debt financing, as well as outsourcing partnerships and strategic investments. Hy24 did not disclose the specific investment amount, but the company is considered one of the most influential hydrogen energy industry funds globally.
Meanwhile, early investors including Just Climate, a low-carbon fund under former US Vice President Al Gore, and Nordic private equity firms Altor, FAM, and Kallskär, have also indicated that they will increase their stakes.
The entry of Hy24 is seen by the industry as a strong signal—a French hydrogen energy think tank expert stated: "Hy24 is investing in the entire industry, not just a single project. B27R085 oriented electrical steel, This shows that they believe Stegra is a safe investment with long-term potential." Stegra was founded by the Swedish private equity firm Vargas Holding, which is part of the same group as the previously bankrupt battery manufacturer Northvolt.
The project aims to begin production by 2030, with an annual output of approximately 2.5 million tons of green steel, achieving a reduction in carbon emissions intensity of about 95% compared to traditional steelmaking.
The technological approach involves using green hydrogen (H₂) for the direct reduction of iron ore, combined with electric arc furnace (EAF) production, utilizing renewable energy electricity throughout the entire process.
However, the project faced a funding gap of over $1 billion due to soaring construction costs, equipment delays, and a freeze on previously planned financing. B27R085 oriented electrical steel, Citigroup, the lead lender, recently even indicated its intention to withdraw from the loan.
