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Swedish green steel company Stegra plans to raise about 975 million euros (USD 1.1 billion) to support its Boden plant and strengthen its finances. The firm had previously secured 6.5 billion euros to build the plant, which will use hydrogen from renewable electricity to produce steel. The new funds are meant to cover rising project costs, compensate for missed state grants, and scale up production. Stegra is also exploring outsourcing opportunities, while Sweden's green transition faces financial challenges in industries like steelmaking and long-distance transport.
Swedish green steel startup Stegra is planning to raise around 975 million euros (approximately USD 1.1 billion) to fund the ongoing construction of its steel plant in northern Sweden and to reinforce its financial stability. Formerly known as H2 Green Steel, the company had earlier secured 6.5 billion euros for the project. The plant, located in Boden, is designed to produce steel using hydrogen generated on-site from renewable electricity, a method aimed at reducing carbon emissions in steel production. Advertisement
CEO Henrik Henriksson said that the new funding round is needed to manage higher project costs and to offset certain state grants that the company had expected but could not secure. He added that the additional funds would also strengthen the company's financial buffers, providing more security as the project progresses. Henriksson noted that initial equity commitments have already been received from both the founders and the lead investors.
A spokesperson from Stegra confirmed that the new financing would involve a combination of equity, debt, and strategic partnerships. This round will supplement the previously raised 6.5 billion euros and is expected to carry the company through the completion of the factory as well as the scaling up of production volumes.
The company is also in advanced discussions about potential outsourcing opportunities, which could help streamline operations and ensure smooth production once the plant is fully operational.
Sweden has been a leader in Europe's shift from fossil fuel-based industries toward carbon-neutral alternatives, largely driven by affordable, carbon-free electricity. However, the country's green transition has faced challenges. For instance, the bankruptcy of battery manufacturer Northvolt highlighted the financial risks involved. Industries that are difficult to electrify, such as steelmaking and long-distance transportation, have found that adopting green hydrogen can be costly, making large-scale low-carbon production financially demanding.
Stegra's approach reflects both the opportunities and the hurdles in Europe's green industrial transition, showing that significant investment, careful planning, and strategic partnerships are essential to achieve low-carbon production targets.
Source Reuters
5th Jun, 2025
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