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Sweden has awarded green steel startup Stegra USD 41 million to help complete its hydrogen-powered steel plant in northern Sweden. The funding is intended to improve the company's chances of raising the additional USD 1.1 billion needed. Stegra had previously secured USD 7.5 billion in loans and equity. The Energy Agency emphasized that the new support is conditional on demonstrating sufficient capital by spring 2026. Government backing is expected to boost investor confidence, while the country's green transition continues to face challenges from industrial setbacks like Northvolt's bankruptcy.
Sweden has granted green steel startup Stegra 390 million crowns (USD 41 million) to support the development of its factory in northern Sweden. The funding is aimed at helping the company secure the additional capital required to complete the plant, which will produce steel using hydrogen generated on-site from renewable electricity. Advertisement
The Swedish Energy Agency noted that the project has strong potential to accelerate the shift in the iron and steel sector toward cleaner production. It emphasized that this support would improve Stegra's chances of raising the remaining funds needed to finish the project.
Last year, Stegra had secured loans and equity worth EUR 6.5 billion (USD 7.5 billion) and in October announced plans to raise up to USD 1.1 billion more to complete the hydrogen-powered steel plant. The Energy Agency added that the new funding is conditional on Stegra demonstrating by spring 2026 that it has secured enough capital to finish the project.
Sweden has been at the forefront of Europe's green transition, leveraging cheap carbon-free electricity to move away from fossil fuel-based industries. However, the shift has faced challenges, including the recent bankruptcy of battery manufacturer Northvolt, reflecting some of the difficulties in scaling green industrial projects.
Stegra's CEO Henrik Henriksson said the company has already secured about half of the required funds and expects banks to provide the rest within six months. He highlighted that government backing would strengthen confidence among banks and investors.
As part of earlier support, Stegra received 1.2 billion crowns under a package agreed between Sweden and the European Union, while an additional 1.6 billion crowns of the package had been withheld. Stegra reapplied for the remaining amount and has now received part of it. The company stated that although a funding gap remains, this support allows them to take the next step alongside financiers and creates a more level playing field for similar projects in Sweden and across Europe.
Source Reuters
5th Jun, 2025
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