H2 Green Steel debt package - full financing breakdown

Maya Chavvakula
Aishwarya Harsure
22 January, 2024

HydrogenExclusiveFinancing
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H2 Green Steel (H2GS) has secured €4.5 billion (£3.85bn $4.9bn) in new financing for its manufacturing facility in Sweden.

The latest capital injection has been broken down to:

  • Debt - €4.2 billion
  • Equity - €300 million

The debt was arranged by a club of 20 lenders including multilaterals, commercial banks and export credit agencies.

The debt facility was arranged across two broad tranches:

  • Senior debt facilities - €3.6 billion
  • Junior debt facilities - €600 million

The senior debt facility was further broken down to:

  • €1.2 billion guaranteed to 80 % by National Swedish Debt Office (Riksgälden)
  • €1.2 billion guaranteed to 95 % by Euler Hermes
  • €1.2 billion commercial debt

The commercial debt has a 13-year tenor with "shorter" amortisation. Lenders on the tranche are:

Ticket breakdown:

SEK - €500 million

EIB - €314 million

  • €200 million - guarantees from European Commission under InvestEU
  • €114 million – intermediate financing through commercial banks

NIB - €57 million

  • €48 million – project finance debt
  • €9 million – backed by InvestEU

The €600 million junior facility was arranged by:

The €300 million in new equity was arranged by two existing shareholders along with three new investors:

In addition to the funding package, the company also benefits from a €250 million grant from the EU Innovation Fund.

The proceeds from the financing will go towards the development of H2GS's first green steel plant in Boden, Northern Sweden.
The plant is currently under construction and will produce steel with integrated green hydrogen and green iron production. H2GS has partnered with:

  • SMS group – to purchase low-emission steelworks technology
  • thyssenkrupp nucera – to Purchase its electrolysis technology

Phase 1 of the plant is expected to have a production capacity of 2.5 million tons per year, with plans to reach 5 million tons annually by 2030 in the phase 2.

The project has pre-sold half of the initial yearly output of 2.5 million tonnes of near-zero steel in binding agreements spanning five to seven years.

Founded in 2020, H2GS aims to spearhead the decarbonisation of the steel industry by leveraging green hydrogen.

Advisers to H2GS:

Advisers to lenders:

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