€190 Million Closer to Green Steel Thanks to Nordic Investors

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    Stockholm (NordSIP) – After raising US$105 million in Series A equity at the end of March 2021, and following the permission it was granted by the Environmental Court in Umeå for the construction of its green steel plant in Boden, H2 Green Steel has now announced it secured €190 million in the first close of the series B equity financing.

    Because coking coal is an essential component of steel production, the industry is one of the largest emitters of CO2, accounting for 8% of all global emissions in 2018, according to McKinsey. H2GS was founded to tackle this issue in 2020 by Vargas, an investment company established in 2014 by Carl-Erik Lagercrantz and Harald Mix, which previously also invested in Northvolt and Polarium.

    - Partner Message -

    “This financing milestone is a real statement of confidence in H2 Green Steel. Despite the uncertainty in global markets, a venture like ours, with both a strong business case and a strong sustainable purpose, is clearly attractive to investors. This financing round has allowed us to combine leading industrial companies and global financial institutions, with investors with a strong Swedish participation, creating the investor-base that will set us up for success,” says Henrik Henriksson, CEO of H2 Green Steel.

    The latest equity round was co-led by new investors AMF, GIC and Schaeffler, alongside existing investor Altor Fund V. Also participating in the equity raise is new investor Swedbank Robur Alternative Equity and existing shareholders Vargas, Kingspan, FAM, Marcegaglia, IMAS Foundation, Cristina Stenbeck and Daniel Ek continue to support the company with additional equity funding.

    “We are excited to continue supporting H2 Green Steel. It fits perfectly with our increased efforts to invest in green transition ventures, where we have made a number of other investments such as OX2, Svea Solar and Vianode. H2 Green Steel has proven the demand of its products by already having more than 50 percent of its initial volumes pre-sold to customers across a range of industries, from passenger vehicles and white goods to steel trading clients,” says Klas Johansson, Partner at Altor.

    “We appreciate the opportunity to invest in a world leading industry project with the potential to be both a good deal for our savers, and an important piece of the puzzle in the transformation to a more sustainable society. H2 Green Steel has an ambitious strategy for establishment and growth, and the outlook for a speedy start of production of the fossil free steel that is in high demand and that is very much needed in this global shift, look very good. We look forward to following the company as active and long-term owners,” says Anders Oscarsson, Head of Equity at AMF.

    “H2 Green Steel is the global pioneer in producing carbon-free steel and we are excited to support the company’s mission to decarbonize hard-to-abate industries. As a long-term global investor, GIC is committed to providing capital to develop solutions that decarbonize the economy. We look forward to supporting the H2 Green Steel leadership team, as they deliver on their first greenfield opportunity and meet the already-outsized demand for their product,” Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC adds.

    H2 Green Steel has also pre-sold 1.5 million tonnes of the total 2.5 million tonnes (60%) it will produce from 2025 onwards. Customers that have signed term sheets or supply agreements for steel so far with H2 Green Steel include Adient, BE Group, BILSTEIN GROUP, BMW Group, Electrolux, Kingspan, Klöckner & Co, Lindab, Marcegaglia, Mercedes-Benz, Miele, Mubea, Purmo Group, Roba Metals, Scania, Schaeffler AG, Zekelman Industries and ZF Group. Asides from its investment, Schaeffler AG also has a commercial partnership with H2 Green Steel also significantly strengthened its relationship with a new technical partnership.

    “Securing supply chains and making them more sustainable is a top priority for Schaeffler. We are proud to be an investor and a strategic technology partner for H2 Green Steel. Together we will contribute to decarbonizing supply chains. Through its participation, Schaeffler secures its long-term supply of green strip steel and significantly strengthens its network in this crucial material area,” says Andreas Schick, Chief Operating Officer of Schaeffler AG.

    Image courtesy of H2 Green Steel
    - Partner Message -

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