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Construction companies in the Nordic region are collectively betting on a construction project located south of the Arctic Circle and equivalent in size to 400 football fields – the world's largest green steel plant, being developed by the Swedish startup Stegra AB.
The project is currently about 60% complete, but the Swedish company, founded just five years ago, is facing soaring costs and delays in government subsidies. B18R070 oriented electrical steel, It now urgently needs new funding to keep the project on track – this new steel plant is seen as a benchmark for the "fossil fuel-free transition" in the steel industry.
To date, Stegra has raised approximately €6.5 billion (approximately US$7.6 billion) through equity, debt, and subsidies, but still needs an additional €1 billion to complete the project.
The project is located in Boden, northern Sweden, and currently employs approximately 3,500 workers, with hundreds of companies involved in its construction. These include the Swedish construction group Wästbygg Gruppen, whose subsidiary previously participated in the construction of Northvolt AB's battery factory in Skellefteå (2019–2022), a project that later went bankrupt and became a "cautionary tale" in the industry. This has made construction companies more cautious about the financial risks of large-scale green projects.
To address potential challenges, Stegra recently appointed a restructuring expert to its board of directors. A company spokesperson said the project is "proceeding as planned," and the latest funding round is expected to take several months.
The factory planned by the Stegra project will replace coal with green hydrogen for steelmaking, significantly reducing carbon dioxide emissions. B18R070 oriented electrical steel, It is widely believed that this factory has the potential to become the world's first steel plant to achieve industrial-scale production of green steel (steelmaking without the use of fossil fuels).
Swedish company Wästbygg Gruppen, through its subsidiary Logistic Contractor, is responsible for constructing the cold rolling mill and warehousing facilities for the factory. The construction contract, worth approximately 1.7 billion Swedish kronor (approximately US$181 million), was signed in 2023. B18R070 oriented electrical steel, CEO Patrik Mellgren stated that the company has included payment guarantee clauses in the contract to mitigate risks and hopes that this "important and significant project" will be completed successfully.
Finnish company GRK Infra Oyj is responsible for the foundation, civil engineering, and concrete foundation works. According to the company's IPO prospectus, this is the largest contract in GRK's history, with an initial contract value of nearly 200 million euros, followed by additional contracts of approximately the same size. The project is expected to continue until 2026.
According to analysis firm Inderes Oyj, Stegra's need for additional financing is one of the main risks facing GRK in the future. GRK declined to comment on this before the release of its financial results on October 30.
